Beware of the Three Sharks!
Successful product development requires knowing the future. You don’t need to know it precisely, but you must have a good idea of the direction you should go.
Most times the future is under our very noses. You don’t have to be a palm reader to see it, nor do you need a crystal ball. What you do need is a method for seeing what will destroy the present. I coach teams in how to use my Three Sharks tool to do just this.
All products and services begin to competitively degrade the very day they are created due to the three forces of destruction. By understanding these forces of destruction, you can anticipate them, plan for them and, best of all, shape them to your advantage. The good news is that while these forces are attacking you, they are also attacking your competition. By recognizing and reacting to them sooner, you can achieve advantages, as well as gain footholds in promising new markets. I call them these forces of destruction “Three Sharks of Change”.
The first is the Shark of the Marketplace. The second is the Shark of Technology. The third is the most vicious of them all, the Shark of Competition.
By understanding where these sharks are circling now, you can begin to systematically project where and when they will attack in the future. You don’t have to lock yourself in an underwater cage. You can swim with these sharks, learn their ways and use them to your benefit.
The Shark of the Marketplace
The Marketplace Shark is driven by ever-changing human Wants. Wants are created by constantly shifting tastes and status symbols. No market ever stands still. Consumers are always demanding something that is “better.” The trick is to anticipate and respond to these changes before your competitor does. New products and services are continually challenging the dominance of mainstay offerings.
For example, the Internet forced Microsoft to entirely revamp its product strategy. Microsoft saw the Internet coming but reacted at only the last minute. And then there are the examples of YouTube, Google and other new products and services that branch out to create new categories of growth, while larger companies looked on.
The Shark of Technology
The Technology Shark is always on the move. It can quickly devour you. Remember that when I use the word “technology” I mean the processes that convert existing Things, such as information, labor, materials, and money, into new Things of higher value to meet existing or new Wants. New technology goes well beyond Things associated with engineering and manufacturing to include services and even business policies.
Take for example the story of the leading manufacturer of slide rules, as described in Steven P. Schnaar’s book Megamistakes. The company, Keuffel & Esser, was commissioned to study the future. Its study produced many interesting findings, some of which came to fruition, but most of which did not. Astonishingly, one of the things it failed to foresee was that within five years the company’s own slide rule product would be obsolete, the victim of a substitute product, the electronic calculator. K&E ceased production only a few years later.
The Shark of Competition
The Shark of Competition is the most vicious of all. It can suddenly arrive from many different directions. Please remember that when I use the word “competition,” I do not mean your existing competitors. Bob Seidensticker, in his book FutureHype, reminds us that the most significant new products are likely to come from unexpected sources. Odd as it may seem, the most profitable innovations rarely come from companies that would seem the most likely sources. The digital watch did not come from the established Swiss watch companies. Video games didn’t come from Parker Brothers or Mattel. The ball-point pen did not come from the fountain-pen industry. The Internet didn’t come from Microsoft.
The product development teams we coach use our Shark Prediction tool right at the start.
It is a method for systematically seeing what will destroy the present in the future. The Shark Chart predicts, across three time dimensions, where threats and opportunities will come from.
For a tutorial on using the Shark Chart, see Chapter 1 of my book “The Rules of Innovation”.