Platt Perspective on Business and Technology

Moving past early stage and the challenge of scalability 25: answering to the innovation imperative

Posted in business and convergent technologies, startups by Timothy Platt on March 24, 2013

This is my twenty fifth installment in a series on building a business for scalability and long-term success (see Startups and Early Stage Businesses, postings 96 and scattered following for Parts 1-24.)

I began discussing the role of ubiquitous computing, data and information sharing and communications, and the impact of always being connected, from anywhere to anywhere and at any time in Part 23 and Part 24 of this series. And as a part of that discussion, in Part 24, I noted a fact that is perhaps obvious – but that is also generally overlooked:

• This emerging technology and business model opportunity can serve as a driver for differential success the way it does, precisely because it is still fluid and very rapidly evolving.
• As such, it offers real opportunity for differences to arise between competitors, in how or even whether they would develop and implement best practices for it.

I also noted in follow-up to that, that all of the basic underlying technologies for this, and all of the basic application approaches for utilizing those technologies will mature and stabilize, and become thoroughly mainstreamed. And every business will be doing, if not exactly the same things and in the same ways for this, then at least close enough to the same so that these technologies and application processes will no longer serve as points of competitive distinction or advantage, and either in that immediate here and now or as a basis for business expansion and scalability from that point on.

I said at the end of Part 24 that I would at least in part expand on that here in this series installment, so I begin this posting from there and by posing a simple and even basic question. Setting aside consideration of whatever might come next as a new and emerging driver of competitive advantage and scalability, or any other source of innovation that might arise coordinately with ubiquitous computing and communications as a defining value differentiator for business performance and growth potential:

• What will business operations and strategy be like when these technologies are fully matured, and when even late adaptors are all fully invested in best practices approaches and implementations for them?

A full answer to this would require a crystal ball and ability to foretell the future but some of the basic outline-detail features of any viable answer to that are in fact, relatively easy to predict.

• These technologies and their applications are increasingly bringing all of our local and national marketplaces together into a single, seamlessly interconnected global marketplace,
• And they are reshaping the perspectives and assumptions of consumers and end users who comprise that globalizing marketplace, and both individually and collectively as they network together to share insight and opinion.
• These technologies and applications are expanding the base of what we as consumers seek and expected, and when pricing competition is global, this in general will serve to keep prices down. That, and collateral factors, as an aside help drive the development and expansion of international free trade unions and organizations – this globalization is taking place at all levels, and with all of this largely driven by globalization of communications and capacity to trade and to do commerce.
• Coming back to the level of the consumer, (here the individual consumer as in business to consumer, or buyer as is business to business transactions), we are all quickly coming to see what we buy and use and where we buy it as being global – and therefore essentially placeless. When everywhere and anywhere are all equally available, “where” per se no longer matters.
• We go online and order or we connect telephonically and order, or we do so through a combination of channels and it does not matter where we do this from or where we get our purchases from geographically, or where or how the supply chains or other business collaborations involved are located or where they function in facilitating this or even if other businesses are involved in this or not.
• This, in a fundamental sense can be seen as an ultimate playing field leveler.
• But at the same time, there is nothing in any of this that would abrogate the basic principle or empirical manifestations of the Pareto principle and the vast majority of any given type of business transaction will still go to a correspondingly small percentage of the businesses participating in that particular product or service defined market space.

And this brings me to the fundamental question that I would at least begin to address here in this posting:

• What distinguishes between the long tail businesses that capture smaller shares of any given market space activity, and the businesses in that small but select group that by transaction volume dominate it?
• What, in other words distinguishes between the Pareto principle big winners and the larger number of also-rans?

This is a question of here and now competitive strength and market share. But it is also very definitely a question about expandability and of fundamental, from the core scalability of the business and its business model.

And this brings me to the issues of effective early adaptors, and the selective embracing of innovation, and in ways that supportively build into the business and its business model. Yes, that means best practices, but it is not about best practices per se, best practices in general – it is about finding and creating the right best practices that make potential innovations reach their full potential in the specific business’ context.

What is going to be the next big thing to come along after our rapidly coalescing ubiquitous computing and communications, with cloud computing and all of our multifunctional communications and connectivity handhelds and more? I do not know. But I do know that as this wave of innovative opportunity crests and subsides, the businesses that identify that one first, and that find what for them are true best practices out of it will be in the best position, and both for immediate competitive advantage and for scalability into being Pareto principle market space leaders. That is what is currently happening here and now as I write this, with companies such as Amazon, Google, and Microsoft holding leadership positions. It has happened before as earlier fundamental game changing flows of innovation have erupted on the scene and diffused out through patterns of implementation, refinement and further innovation. This basic pattern is all but certain to repeat in new forms too – and understanding that and finding and riding that wave will define which businesses come to grow and lead too.

I am going to flip this discussion around in my next series installment, to discuss the issues and challenges of avoiding sclerosis and keeping the organization lean and simple. Meanwhile, you can find this and related postings at Startups and Early Stage Businesses. You can also find related material at Business Strategy and Operations and at its continuation page: Business Strategy and Operations – 2. You can also find this and related postings at Ubiquitous Computing and Communications – everywhere all the time and its continuation page.

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