Back in 1997, Clayton Christensen’s best selling book The Innovators Dilemma was released. It was a revolution in business innovation. The Economist named it as one of the most important business books ever written. It was reportedly one of the few business books recommended by Steve Jobs and was on the executive reading list of Jeff Bezos.
The Innovators Dilemma
Why am I telling you this? Because the uncovering of the ‘dilemma’ was an important step in solving the problem. A very brief summary of the Innovators dilemma is this – established companies face a difficult situation because they are weighed down by maintaining their core business. This allows innovative startups to disrupt the market with a cheaper, albeit lower quality solution. If you’re in the ‘innovation field’ you’ll want to study it yourself in detail. There is a lot more to it but the fact that dilemma can be outlined readily, proves it’s worth I believe. Often the most enduring business advice is the simplest to explain.
The solution is to enter the market from below. Create a product that is not as good as the incumbents’, but is cheaper, easier or more convenient.
The Social Dilemma
This brings me to a new type of dilemma in the news lately – the social kind. Netflix’s new documentary called ‘The Social Dilemma’ is about the platforms that have been built around the advertising model. This is the model in which it’s claimed that the ‘user’ is the product i.e. their data is used to attract advertisers. In the documentary, former employees of Facebook, Youtube, Pinterest, Google, Twitter and more reveal how the algorithms they built are used to keep users ‘addicted’ to their screens. There are many good reviews and discussions on the revelations I encourage you to read. Ironically the conversations are happening on the same social media that the documentary warns about but what can you do. The origins of the documentary stem from the Center for Humane Technology which was co-founded by a group concerned about the consequences. They aren’t alone. There is the Stanford Human Centered Artificial Intelligence and various AI/Tech ethics researchers and journalists who have been questioning the human impact. I started writing about this subject myself from Jan 2019, a few years after moving to Silicon Valley. I talk about my personal experience with social media here.
The documentary is an important must watch. Although I have been in the industry for many years and much of the content came as no surprise, it still has major impact hearing it first hand from the inventors. There is some important framing of the problem, presented in a way that sticks in your head. Like the fact only drug companies and tech call their customers ‘users’. Or the unnerving thought of wikipedia showing something different to every user rather than the same truth.
So Now What?
However, a natural response to the documentary is to ask – so what can we do? The documentary had a few suggestions from the interviewees as the credits rolled. Delete your apps, stop your children using social media, etc. All very well but in some cases not very practical especially if the taking away of these things does not leave us with many things to fill the void. So what is the solution?
The Innovators Solution
Here I turn back to Mr Christensen. After the success of ‘The Innovators Dilemma’, he wrote a follow up called ‘The Innovators Solution’. This sought to go through approaches and strategy for those caught in the dilemma offering ways to overcome this predicament. The book was also a huge success and for many innovators, more useful than the original. A summary of the solution is not so easy to sum up into one line. The innovators solution is not the same answer to the social solution – the dilemmas are different but the process of identifying the dilemma fully before moving on to a solution is an important one to follow.
We can borrow some lessons for responding to ‘incumbents’ (the name used by Christensen to describe the established usually large companies caught in the dilemma. The incumbents right now in the social network and media space are the big platforms who have built up an enormous body of data about us. Disruption is unlikely to come from within precisely because of the innovators dilemma. It is difficult to innovate when you are holding on to your core business and not wanting to disrupt that.
Is the Product Free?
Newcomers can (and probably will) move into the gaps not being served by the incumbent and offer the goods for free. It may not be the highest quality or offer all the features of the incumbent but it could provide it for cheaper. But in this case, the product is free, so what does cost matter? An average user doesn’t pay for FB or Google. Or do we? We do in fact pay in the form of giving up our data to them and allowing ourselves to be targeted for ads. If an innovative newcomer was to enter the race, that ‘cost’ to us could be greatly reduced i.e. our data won’t be used as bait for advertisers. It’s not that simple though. Many newcomers have come to disrupt the market only to be bought by an incumbent or fail to present the reduction of cost to the user as a benefit. Most users are either unaware they are the product or they don’t really care.
Look to the Periphery
There are some good articles to read that go through the Innovators Solution in more detail. There are a couple of clues to where the social solution may come from.
“Managers of industry-leading businesses need to watch vigilantly in the right places to spot these trends as they begin because the processes of commoditization and de-commoditization both begin at the periphery, not the core.”
The trends often emerge from the periphery. Somewhere, someone outside of the platforms is probably building something new that we hope will divert the path we’re on of screen addiction. The best solutions usually involve the invention of something new to replace what is already there. Removing temptation might not be enough. If we look to history, a new disruptive solution is most likely to be the answer.
Choose the People Carefully
Who will be the people who solve this social dilemma? Should it be a new set of people who didn’t create the original platforms and models? In the Innovators solution there is advice for who is most suitable as the drivers of disruption. The best innovators are the people with the greatest ability to learn.
Failure and bouncing back from failure can be critical courses in the school of experience.
Those who’ve lived through it and know what the failures were. We need the people who know where the bodies are hidden. Those who were smart enough to build platforms at scale that were so effective. Let’s hope they’re all working on a solution now and we’ll learn about it in the next documentary.
A Motto for the Disrupter
Lastly I will leave you with this from the Innovators Solution. It’s a powerful motto for the disrupter. Leaving aside the profit helps us focus on growth of a new solution. Advertisers and the model or algorithms can be ignored. Patience and I would add a stubborn regard for the protection of the ‘user’ (who we should call ‘customer’) is the key to this.
Patient for growth, impatient for profit.