The Wall Street Journal had two particularly interesting stories yesterday. The first ("How Water Backpack Went to War", reprinted without registration at the Pittsburgh Post-Gazette) talked about how a small company has found success adapting a backpack it developed for hikers for military purposes. The "CamelBak" gives users ready access to a clean water supply without needing to reach for a bottle, obviously a critically important need for soldiers in arid environments or under threat of chemical or biological attack.
Interestingly, the company that makes the "hands-free hydration system" (appropriately named CamelBak Products LLC) has said that its military work has helped its consumer marketing as well. The military forces it to push the frontier along different dimensions than regular consumers, and the innovations the company develops helps it further improve that offering.
A story like this one talking about how an innovation designed for the consumer market has found its way to the military crops up every few weeks. Someone who combines systematic thinking about unsatisfied jobs to be done of on-the-ground soldiers with focused innovation efforts will have a blockbuster business on their hands.
The second article ("At Starbucks, a Blend of Coffee And Music Creates a Potent Mix") discussed how Starbucks has moved into the music business. If youve been to Starbucks recently you probably have noticed this. Most Starbucks have a couple of CDs by the register. Some CDs, such as Alanis Morissettes recent effort, are exclusively distributed in Starbucks.
Although the connection between coffee and music might seem to be a bit tenuous, Starbucks forays into music make a great deal of sense. It comes back to that age-old question: What business are you really in? Starbucks wants to define itself as the third place beyond the home and the office. What do you do at a third place? Drink coffee, surf the Web and listen to music. Although its not clear exactly how big a money maker the CD business will be for Starbucks, it will be interested to see what other services the company layers on as it seeks to maintain its heady growth trajectory.
Any other examples of products cascading from the masses to the military? Or thoughts on reasonable add-ons at Starbucks?
Backpacks and CDs at Starbucks
Scott D. AnthonyPosted by Scott D. Anthony in Comments (4)
Discussion
Posted: Thursday, July 21st, 2005 - 12:05 pm EDT
mr. anthony;
your posting today reinforces one of the confusions that i keep stumbling over when I read about real world "examples" of innovation and then i try and tie that example back to mr. christensen's framework.
for example, in the second innovator book one of the critical factors discussed is price....it details how you need to offer products with innovations at a price point that is at least the same - - and probably lower - - in order to really have something that is "disruptive" vs something that is simply sustaining.
however, many of the innovations (for example the backpack in your post) that i read about, especially in the world of consumer products, seem to take a mass produced product, layer on an innovative attribute, and sell it for MORE to a highly specific market (or to do a very specific job...to use your wording).
which leads me to my confusion. how can it be that the maker of the camel-backpack is actually what you would call an innovator rather then just a creator of a sustaining attribute, when they are charging more for their product?
how ciritcal is price when taking into account other attributes such as speed, focus, personalization etc.? can you charge MORE and still win?
another example that reinforces this question is the company Under Armour. www.underarmour.com they took a basic product, your standard workout gear(t-shirt, shorts etc) used a different material, raised the price and have been growing ever since. would you consider them an innovator or just a company that caught a sustaining technology before the inncumbents?
the entire issue of price and innovation is something that I would love to learn more about.
any comments, feedback would be appreciated.
jdrane.
Posted: Thursday, July 21st, 2005 - 5:13 am EDT
IMHO I think you are mixing two types of disruption:
Low-end Disruption ( which can occur when performance in an existing market is overshot by incumbents )
and
New-Market Disruption ( which attacks non consumption )
The military example is non-consumption ( a competely new way to hydrate for the military )
The under armor example is a typical Porter's Differentiated competitive approach....new better higher cost product that does the same thing but better (sustaining) and not disruptive.
Posted: Thursday, July 21st, 2005 - 5:17 am EDT
IMHO I think you are mixing two types of disruption:
Low-end Disruption ( which can occur when performance in an existing market is overshot by incumbents )
and
New-Market Disruption ( which attacks non consumption )
The military example is non-consumption ( a competely new way to hydrate for the military )
The under armor example is a typical Porter's Differentiated competitive approach....new better higher cost product that does the same thing but better (sustaining) and not disruptive.
However, if you could combine Under armor with the new backpack hydration and without the backpack then indeed you would have a disruption!!!!
Posted: Saturday, July 23rd, 2005 - 3:18 am EDT
To elaborate on jhughes's useful reply:
The combination of price and the disruptive innovation theory often times gets awfully confusing. There is a general notion that disruptive innovation is synonymous with cheap. Sometimes that's true, but other times that is not. When it really is more of a new-market, compete against nonconsumption approach, there is less of a basis for comparison so price becomes less relevant. Remember the first personal computers? They certainly weren't cheap! They were a lot less expensive than a minicomputer, but a lot more expensive than a pad of paper or a calculator. Clearly you always want to have products be as reasonably priced as possible, but the big three questions in my mind for the innovator seeking to shake up the market is:
-- Is the consumer looking for something different?
-- Do you have that different solution that the consumer would consider better?
-- Is there a competitive gap in the marketplace?
The backpack fits nicely here. The soldiers don't really have any adequate solution to some problems. They consider the CamelBak different and better. And there's no real competitor that a) feels pain by the success and b) has the right resources to go after the problem.
Hope this is helpful!
Scott
p.s. love the under armor combined with the backpack hydration. Innovation always occurs at the intersections ...
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