Thursday, December 29

The Need for Speed: Net Product Lifecycles

My last post "The web is more powerful than a brain" leads onto thoughts of how short a products' life is becoming. It's not a new phenomenom but it is now spreading into new industry sectors.

We're all used to our digital camera's, phones and PC's being rendered out-dated within months, obsolete in little more than a year. To date, both on and offline, this has come down to fierce competition, manufacturing improvements and transient/demanding consumers. Now and with particular reference to the web these lifecycles are getting progressively shorter.

Ruby on Rails, Ajax...the plumbing of our next generation web have made the creation of sophisticated, interactive apps faster and cheaper than ever. So much so that my metaphor of a collaborative "web brain" is launching, crashing and burning new tools and businesses faster than anyone can compete with.

In the real-world, the newly equipped factories and design houses in Asia are tooled to turn prototypes of phones, accessories, PCs into finished articles within weeks rather than months and years. The same applies to shoes, cars and even home furnishings.

In my experience many businesses have not actively acknowledged these short lifecycles in their corporate strategies - the annual (once a year only plan/budget) continues to live on. Some of the effects are:

- Greater risk per product (each launch has to pay back quicker)
- Puts more emphasis on managing and minimising investment (to match a shorter sales life)
- The need for speed (the consumer and the competition wont wait for your board to make decisions)

There are many lessons to learn from Amazon and the like in this regard, but perhaps even more from mobile phone manufacturers - who have huge investments to lose if they are not nimble and in touch with their customers needs.

So, whilst many corporates are struggling to deal with 'The Need for Speed', the small guy - the entreprenuer - at least for now, has a much stronger hand than ever before. He can move quickly from idea to product and assemble teams as required. And by being a small business, he is forced to minimise his financial outlay. In this case 'fortune favours the fast'.

Have a happy new year.

1 Comments:

Anonymous Anonymous said...

Simon,

Absolutely agree with your post but I think there is a step further.
Constant risk taking but efficent innovation resulting in minimum energy but high impact for me is as important.

There is no resting on laurels or parking to product to commercialise fully. I also belive the issue isn't even budgetting cycles but the capacity for business managers to take a risk with there product that could either revolutionise it or just as likely destroy it. It seems that the choices most large companies are making is to look for the slow declie to death and hope you have moved on before it strikes.

I also believe that the expontentail graph that the 'investors' love to see when you prestent a business case is no longer relevant.

Take the case of friendster and myspace - Freindster was ahead by a street mile, but with constant risk taking based on instant information on what "is and was working" meant that the rate of efficent innovation within myspace developed the product on an hourly if not daily basis. The reason that they could achieve this, they approached product development in much the same manner you moderate a message board, constant and instant reaction by the site owners.

Now I ramble ..

see you in the new year matey ..

31 December, 2005 09:51  

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