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A lot of innovation involves taking ideas from different areas of life and
kinda combining them in new ways.
And that's a very powerful way to innovate.
In fact, that's probably the main way in which people innovate.
And, some of the most powerful innovations that we've actually seen in the world
are ones that kind of take ideas from areas that people don't think are related
to each other and put them together in a really insightful way.
And entrepreneurs and
firms can really benefit from being able to do that, but it raises an interesting.
Right? Or an interesting challenge really,
which is when you do that you then have to try to explain to people what this is.
And what you're doing when you're borrowing from those different categories
where you're taking ideas from different domains or you're taking an idea from
Biology and you're combining it with an idea from Computer Science lets say.
Now you have this kind of hybrid product that's kinda mixed of these two
different things.
And the problem is that people, the rest of the world doesn't think about
the hybrids, they think about things in terms of the existing categories.
And so we think about firms as being auto manufacturers, and
we think about firms as being telephone manufacturers.
Right? Or something like that.
And a good example is a product like a digital camera.
Right? When digital cameras first came out,
digital cameras were kind of a combination of a computer,
an electronics device, and a camera.
Right? Like a film camera, with the lens and so
on and so fourth.
That poses a challenge for, stakeholders, for consumers,
for investors, and for others.
Because how do you make sense of that?
So when you first see a digital camera, is it an example of a camera?
Or is it an example of an electronics device?
Or is it an example of a computer peripheral?
And a lot of what my work looks at is kind of try to understand how that
ambiguity that's inherit, that's kind of a genuinely innovative
new product affects the strategies and kind of the success of firms.
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The people can't kinda classify products or
services into things that they already understand then they have to engage and
kind of effortful reasoning to make sense of that.
Right?
And to try to understand what they're doing.
And the more you have to do that it actually turns out the less you are likely
to value it.
Right?
Like we tend to value things more the easier it is for
us to recognize what it is that they are.
And so the challenge for innovators and for
entrepreneurs is to find a way to help make it easy for
people to make sense of the product or innovation that you have come up with.
And often times the way they do that is through analogy.
So we use the power of analogy as a way of getting people to anchor on
a certain set of expectations and then use that to interpret the new device.
Right? So we say,
well the iPhone is like a cellphone except that it also has the following features.
Or we say that a digital camera is like a camera but
it also has the following features.
And by doing that,
we on the one hand invoke a lot of associations that are really helpful, but
we can also constrain ourselves in different kinds of ways.
Because we might end up with associations
with our product that we don't necessarily want.
It also creates a really hard strategic challenge for the company because you,
because you're choosing from lots of different categories.
You have different choices in terms of what analogy you're going to draw.
Or you're gonna say its more like this category, or more like that category.
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Obviously whats hard about that when you're in a new product category and
your new innovative category.
Is for the entrepreneurs you don't know which one you're supposed to put your bets
on and so that feels really risky.
But, that doesn't mean that you shouldn't do it.
Right? You still have to make a bet.
So you have to kinda take what your best guess is for what the right analogy is,
because otherwise you just end up as a muddle and then nobody can really make
sense of it and you tend to devalue you for that reason.
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So, if you're a big, established company, then people try to look at that product,
and then they say oh, this must somehow be related to what they already do.
And, that puts a constraint on of how people make sense of it, and
therefore, effects your ability to be innovative.
I think a good example comes from the realm of digital cameras.
So when digital cameras were first introduced,
what you saw was producers from all different kinds of industries.
In particular you saw the traditional film camera producers enter into the market and
start making digital cameras.
So you saw the Nikon, and the Canons and so on and so forth.
But you also saw computer companies come in.
So you saw HP make digital cameras, and you saw electronics firms like Sony or
Panasonic come into the digital camera business as well.
And one of the thing that my research shows that
early in the history of the industry, you were actually better off,
in terms of how consumers thought about the quality of your product.
If you were a producer who had a history of making film cameras.
And my understanding of that or the way I explain that is that, really what that is
about, is about what kind of mental models they apply to the product that they saw.
And so that if you saw a digital camera that was made by Hewlett Packard.
You tended to interpret that through the lends of what a computer peripheral
manufacturer would make, or computer manufacturer would make.
And that set your expectations for what the product could or couldn't do.
While if you were coming at it from the lends and
you're looking at a product that Nikon had made, then your expectations are shaped by
what a traditional camera manufacturer was able to do.
And those things make a big difference.
And so I think the lesson for large firms is that really your existing identity in
the market like the kinds of products and services that you're known for can really
restrict your ability to introduce new products into the market,
if they're genuinely innovative and
genuinely different from what you already know how to do.
That doesn't mean you can't introduce them.
But you have to do it in a different way.
Because if you do it under your own brand name,
then people start to invoke those associations with your existing products.
And that might not be the best way to actually go.
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I think startups have a big advantage in the sense that they don't have the legacy
of the past or the burden of the past.
Right?
So a startup comes up on the scene with a new technology.
Nobody has an association with any existing set of products.
So on the one hand that's a liability because you've got to build up
a reputation,
you've got to kind of establish what type of product it is and so on and so forth.
But it can be an advantage because you have more degrees of freedom,
you have more latitude to choose how it is that you want to portray, what it is that
you are actually producing, and what the value of your product is.
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I think entrepreneurs and innovators often times think about the hard part being
the technical side of the innovation.
Right?
So how do it really get those components to work together
in the way that I've imagined that they will?
And there's no doubt that the technical side of it is really important.
But we have to not lose sight of the social side of it as well.
Right? In the kind of the external facing,
how is that people are gonna make sense of your product,
relative to all the other products that exist out there in the world.
And that's a very hard part of it as well.
And the really successful entrepreneurs are gonna be the ones who solve both
the technical problem and the market identity problem.
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