Avoiding Your Napster Moment

In a previous post I talked about how companies are often blind-sided by what I call Napster moments.  Napster moments are radical, game-changing innovations that can throw businesses and even entire industries, into oblivion.

I also promised a list of things, that from my experience and research, companies should do to reduce the odds of falling victim to these Napster moments.  Observe most highly successful contemporary companies and chances are you’ll spot some, if not all, of these behaviors.

Here they are, in no particular order:

1. Think radically

Successful companies unlock opportunities by questioning their industries’ most sacred paradigms and throwing conventional wisdom out the window. Apple stores for example, were engineered on the premise that store employees would not try to sell anything.  Rather, their goal was simply to help customers solve problems and relieve their computing pain.  The outcome of this non-selling approach was enormous trust on the part of customers who, in the process, felt more comfortable spending their money (and lots of it) with Apple.  In other words, while other retailers were pushing discounts, staff incentives and tired old selling-skills training, Apple was breaking the first cardinal rule of retail and encouraging their staff not to sell.   Apple’s radical approach to retail resulted in some of the highest sales per square foot statistics in retail history.

2. Innovate in a non-linear way

What made Napster so disruptive to the music industry was its non-linear nature.  It wasn’t simply an incremental and predictable improvement on the industry’s sales and distribution model.   It was a complete rethinking of the way music was packaged, sold and consumed.  Napster didn’t merely improve on current technology – it eradicated it completely.  Non–linear innovation often combines seemingly unrelated things to bring entirely new product and service alternatives to market.  They are more difficult to develop but can create enormous competitive distance if successful.  Vibram, for example, took a non-linear approach to innovation with their “five fingers” shoe design.  While other running shoe makers were focusing on incremental improvements in cushioning, support and design, Vibram conceived a shoe that instead fits like a glove, allowing for a unique barefoot running experience.This is not to imply that incremental improvement has no place in your plans.  What I am suggesting is that if you focus solely on linear product modifications and extensions, you will not last long.

3. Get your head out of your association

Most industry associations have a mandate to make their members stronger and smarter but often fall short because they’re inherently risk averse.  Ideally, they should be trolling the dark waters for the horrible, disruptive things their members might not like, but really need to confront.  However, in many cases they tend not to, for fear of upsetting their membership and losing revenue.  So, while they should be champions of breaking down the status quo, they often do just the opposite, because it’s the status quo that pays the dues. It’s vital that companies not rely on their industry associations as their sole source of perspective and insight.  Instead, create out-of-industry alliances to exchange ideas and attend unique non-industry conferences.  Do whatever is necessary to find out what’s happening beyond the walls of your own industry.

4. Stop listening to your customers

If you build only what your customers ask for, your products and services are certain to be mediocre and cheap.  As Henry Ford said, “If I’d asked my customers what they wanted, they’d have said “a faster horse”.”  Don’t focus effort on building what your customers say they want –they don’t have a clue.  Build what they need but don’t know yet that they need it.  This means confronting the real issues with your product, service or industry and then hiring really smart people to create brilliant and often unconventional solutions.  If you must, hold focus groups to see what consumers think of your new products – not to find out what they think your new products should be.

5. Aggressively pursue your own obsolescence

I know it sounds like suicide but bear with me for a minute.  All business models have a lifespan yet very few businesses actually plan for their demise – for the day when what they sell or do is no longer necessary.  Fewer still actually attempt to disrupt their own model.  But here’s the thing… If you control the obsolescence of your own product or service model, you are by definition the one best positioned to own the new model – at least for a while.   Blockbuster Video, for example, had a chance to eradicate the brick and mortar video distribution model on which the rental industry stood and in doing so, control the subscription model.  But even after being approached by Netflix to explore a potential partnership in 2000, Blockbuster chose instead to defend its dying model of distribution.  Like Blockbuster, the rest is history.

To avoid Napster moments, become Napster

In essence, what it comes down to is that the only sure way to avoid Napster moments is to be the player in your industry causing them to happen.  If you don’t define the terms of change in your industry, someone else will.  History shows that the choice is pretty simple  – disrupt or be disrupted.