Disruptive Products

There is much discussion about the new Kindle Fire, with Rob Wheeler leading the argument on its disruptive nature.  Horace Dediu has an interesting response, where he argues against the Kindle Fire being disruptive.  I'm not going to get into the details of this discussion, but will leave you to read the articles, and in particular, the comments (if you ignore the ritual trolling, there are quite a few gems there)

Here are a few points from Dediu's article which I find exceedingly relevant to our Hosted PBX service.  The comparison is not as far-fetched as you might imagine, as we are in a disruptive business. After all, one has only to look at what is happening, or will happen, to the on-premise PBX market thanks to services like ours!

(About RIM) People ascribe myopia or incredible absence of mind to RIM’s management but the opposite is true. They were deeply committed and observant of the things which made the Blackberry successful. It just happened to be something that stopped being relevant.

Lesson:  Keep track of the value-proposition driving the industry!  If it diverges from your vision, then you are about to lose.  This has the obvious corollary of being willing to indulge in self-examination.

(About set-top boxes) And again, the blame can be placed on the stifling effect of subsidies and dependencies on services or content which dictate where the value and hence the investments should go.

Lesson:  Don't allow your internal business requirements (subsidies, placating an internal group, etc.) to dictate product decisions! What really matters is the market - where it is going, or should go - not placating an internal group, subsidizing your platform, etc.

(About iPhones) The shorter lifecycle works for the iPhone because it has a very high service revenue base to dip into to offset the subsidy. Something none of the content models above could count on.

Lesson:  In an arms race, lifespan matters!  In this case, lifespan refers to big/disruptive features, not tiny capabilities.  Keeping the competition off balance requires that significant changes occur on a regular basis.