Innovate as if you are starting new

I've spent this week thinking about big changes in tech industry impacting incumbent market leaders.  Well, it wasn't that I was looking for case studies.  They were on front pages of newspapers through out this week.

A couple of days ago, there were rumors of Kodak running out of liquidity and looking to file bankruptcy to keep its doors open.  Research In Motion was getting heavy pressure to change its top management from investors to stop the falling stock price.  There were also rumors about Barnes and Noble looking to spin off its Nook business to adapt to changing retail environment, and Forbes ran an article talking about slow demise of Best Buy, another retail giant.

The common theme across all these once dominant companies is failure to adapt to changing business environment.  As consumer's taste and purchasing habit evolved, these once market leaders were not keeping up with changing consumers.

Sometimes you are too early in the market,
but that does not mean that there won't be
any market in future;
case in point, Rocket eBook reader from NuvoMedia

It's difficult to innovate and iterate constantly to get the product right.  But it's much more difficult to innovate and cannibalize your existing business to launch the new product.  Not only will you be tested for your drive to get the new product out, but also you will be asked to balance the old and new while facing resistance both internally and externally.

All these now troubled companies had made their first step of getting the new products out to keep up with consumer demand.  But they failed to stay with it to continue innovate and iterate to get it right because they all underestimated how quickly customer behaviors can change.

With Barnes and Nobles, they were too early entering digital book market back in 1998 with their investment in NuvoMedia.  Having been discouraged with early failure, they pulled out of digital book market in 2003, and took their eyes off of the consumers too long while Amazon was picking up market shares.

Business environment is no doubt changing very rapidly, and it's likely that the pace will quicken in coming years.  Social media coupled with mobile computing will impact not only high tech industries, but it will have as much impact on existing brick and mortar stores.