This article was co-authored by Michael Putz, a Business Development and Strategy Director at Cisco Systems. Putz was an integral contributor to the ideas presented in Seeing What’s Next through collaboration between Cisco and Clayton Christensen on the future of the telecommunications industry. The post reflects the personal views of the authors, not of Cisco Systems.
Click here to read Cuil's Dangerous Strategy Part I.
New-search-kid-on-the-block Cuil Inc. has its work cut out for itself. First, it has to fix embarrassing bugs that plagued its hotly hyped launch this week. Then, it has to figure out how to break from the pattern showing that companies that try to leap over market leaders with a better-performing product typically fail.
Cuil could look to Apple for signs of hope. Apple was far from the first mover in the digital music space when it introduced its first-generation iPod in 2001. That player was superior, and more expensive, than devices offered by Rio, Cabo, Archos, and others. Apple’s iPhone was a late entrant to the smartphone industry. Research in Motion, Motorola, Nokia, and Samsung are still struggling to match Apple’s intuitive interface and powerful computing platform.
In both cases Apple entered an established market with products that were functionally superior to established products.
Harvard Business School Professor and Innosight founder Clayton Christensen’s research found this approach — which he termed a sustaining strategy — tends to not work because it entices devastating response from motivated incumbents who have the right skills to fight back.
In fact, in 2007 Christensen publicly predicted the iPhone’s failure, telling BusinessWeek: “The iPhone is a sustaining technology relative to Nokia ... History speaks pretty loudly on that, that the probability of success is going to be limited.”
Yet, Apple’s digital music strategy has been an unqualified success and its mobile phone strategy appears on its way to similarly rarefied heights. Why has Apple been able to buck the trend? In both cases it recognized that it had to create a completely different value system to disrupt an entrenched incumbent value system.
Read the rest on Scott Anthony's Harvard Business blog, Innovation Insights.