Wednesday, September 17, 2014

Innovation Chasm

Hard copy print out of the Internet with yesterday's news.
As companies grow, seemingly small changes become difficult. Change is even more difficult when companies have been around for a long time. Most companies think in terms of what they do rather than focusing on the benefits they provide. It's hard for many companies to recognize they could be left behind when technology changes. The classic example is the ice trade of the 1800s. More recently, we saw it in the newspaper industry over the past decade.

One clear example of this is SMS. It is a shrinking technology. Since 2005, the cost of sending a single text message rose steadily from 5¢ to 25¢ over the next few years. This falls under category #3 of the The Good, The Great, and The Bad Business Models.

Rarely do people send SMS text messages through their computer. It would be a simple feature, but the carriers didn't implement it. Other companies have stepped in because the wireless carries didn't innovate SMS. It was Grand Central that brought texting via computer to the masses. Apple has taken this one step further with Messages. Messages strongly encrypts the content and deliveries it to multiple devices at the same time at no cost.

The markets are bigger than any one person or company. A company can fight change by controlling or cornering the market, but that won't last forever in high tech. The companies that tend to fight it and succeed for long stretches of time tend to be oligopolies (Think: Big, as in Big Media, etc). It lasts for a while, but what companies truly last for centuries?


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