Innovator's Dilemma in 2 minutes flat

It’s no secret I’m a Mike Masnick and TechDirt fan. He’s my second-favorite economics thinker (Umair Haque is #1), but it’s a close race. His writing on media economics, intellectual property, technology and other topics are on my must-read list every day.

Recently he started doing short videos, sponsored by UPS, to illustrate many of the themes discussed on TechDirt, especially themes related to economics and innovation. I posted his excellent Economics of Abundance video in October.

In these two new videos he explains the much-discussed “innovator’s dilemma” and the difference between innovation and invention. The first is a little more relevant to public broadcasting folks, but the second makes some excellent illustrations as well.

Explaining The Innovator’s Dilemma

Highlights for Public Broadcasters:

  • Legacy leaders either don’t recognize innovation when it appears, or easily dismiss innovations as “not good enough” for the market
  • New technologies advance faster than expected, catching legacy folks off-guard; the new technology also serves market needs more efficiently and serves demand sooner than predicted
  • Understand what market you’re really in: Are you a radio station or do you provide a benefit to your community? Are you a TV broadcaster, or does your service target a specific market need, regardless of the technology?
  • If you don’t improve the benefits you provide to the market, someone else will
  • Internal struggles between legacy and new are expected — the hard part is managing the struggle as the new takes hold and then takes over
  • Out-innovating yourself beats being out-innovated by someone else

Apple is the best example out there today of a company that out-innovates itself. They do it with breathtaking speed and ruthless pursuit of excellence, no matter what happens to their legacy products. Prime example: the original iPod was introduced in November 2001. In less than 6 years they went through roughly 5 succeeding generations of iPods, killing off the older models every year (including the much-loved iPod mini), despite total market dominance.

Then Apple  introduced a whole new category of device –the iPhone — cannibalizing their entire iPod line, a line that’s existed for merely of 8 years. They out-innovated themselves faster than any competitor — even the mighty Microsoft — could respond  in kind. Despite spending millions on development, the Zune media player remains an also-ran in the market; it’s a punchline, not a product.

A “normal” company would look at the market, see no viable competitors (in their eyes) and just keep doing the same thing, making money, until they “needed” to respond to some outside threat. But old eyes can’t even see new threats. “Have you seen the crap on YouTube? That’s no threat to us.” Are you sure about that? Because YouTube isn’t trying to compete on public broadcasting’s turf, but it’s taking contact hours away from you anyway (and they’re moving into commercial video distribution, too).

Public broadcasting, if it is to become public service media, is going to have to give up kneeling before its sacred cows to move forward. It’s not about TV or radio. It’s not even about “news” or “music” per se. We have to figure out (or just plain decide) what market we are serving and what benefits we want to offer the market. Then we can agnostically turn to the tools available today and use them to provide those benefits.

For the record, the “innovator’s dilemma” is discussed in exhaustive detail in the seminal Clayton Christensen book that coined the phrase.

The Difference Between Innovation And Invention

Highlights for Public Broadcasters:

  • Invention is the idea, Innovation is matching the idea to the market
  • Yes, it’s your job to match idea to market; it’s an active exploration, not a passive waiting for good things to happen because we’re good people
  • Even if your product isn’t great at first, you listen to the market, improve the product, listen again, improve again — it’s called iteration
  • “It’s not build a product and be done, but keep iterating, improving and innovating.”

When I talk to public broadcasters about new media, I almost always get complaints about the push they feel to do new things or to do old things in new ways. “We’re being asked to do more with less.” They always want to know “who’s doing this already?” What they’re really asking for is either “permission” to take risks (a permission I can’t offer) or iron-clad proof that if they make a change, everyone will still be employed, budgets will stay on track and really, nothing will fundamentally change.

This is insanity. (You know, doing the same thing over and over and expecting different results.)

Today we need invention,  innovation and iteration.

  • We need invention to create new ideas for serving our markets with benefits those markets need (e.g. information for voters, education for children, community for music lovers, etc.). What about some new ideas for news services (which I plan to present at WOSU late this week)?
  • We need an innovative spirit to take our ideas into the community and see whether we’ve met the needs. Present. Ask. Listen. When we find we haven’t met the needs quite right, we acknowledge it and change. This is in marked contrast to “broadcast it and they will come.”
  • We need a passion for iteration. Look back at the days following the 1967 Public Broadcasting Act: there was a burst of experimentation and then years of iteratively making a better and better product. Remember: it took 25 years for NPR to reach the zenith of its power, matching its service to market demands. If you don’t like iteration, you won’t like the future.

The upshot? We need new DNA, a genetic makeup that embraces the world as it is, not as it was.

And I gotta tell ya… the new world, a world that’s constantly changing, is a lot more fun than the old one.

2 thoughts on “Innovator's Dilemma in 2 minutes flat

  1. Good stuff here. As for public broadcasting, it seems clear we’re in the information and entertainment business. That puts us up against some stiff competition. I agree completely with your points about invention and innovation. I think Oregon Public Broadcasting stacks up well on these accounts. And iteration? I think this comes down to system resources. Are we willing to spread them around in order to duplicate our successes? For that matter, are we willing to share our successes? Walking the line between competition and cooperation has always been a big challenge. We do our best work when we find the right balance.

    1. Thanks for the comments, Michael.

      I think what business public broadcasting is actually in is up for some debate. Information and entertainment is one possibility. But I’ve heard lots of folks talk about education as a primary mission, especially when it comes to kids’ programming. Others, like Bill Kling in his recent paper, suggest it’s information in service of democracy, specifically. There probably isn’t one mission in the system on which we can all agree.

      As for competition, I think we need to stop thinking about that. Each public broadcaster (that needs to become a public service media company) needs to respond to the needs of their community or region and stop paying so much attention to what people are doing in New York, DC, Los Angeles or even at OPB in Portland. We all may take cues from CPB, NPR, PBS or major outlets like WGBH, OPB, WNET, KQED and others, but if we don’t focus energy locally — and use innovation, invention and interation — we’re going to fail separately before we fail collectively. Or if not fail, at least fall in relevance and economic viability.

      Lucky for OPB they’ve figured out public service while keeping some money around for national-quality production. Lots of public service media companies might aspire to that level of support, engagement and production, but I just hope they focus locally and match community needs to media collected, curated and produced.

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