In chess, an ‘elephant trap’ is a killer move. In this article, Paul Stead uses the metaphor to help businesses track a path to new product success.
To making avoiding ‘elephant traps’ more digestible, I’m using one of my favourite problem-solving visualisation tools, the Boston Matrix.
As you can see below, the axes I’ve selected are Market and Technology, with the result that there are four very different ‘traps’ that can be avoided or circumnavigated if viewed through a future technology lens.
A Known technology – within a known market
This is very much ‘business as usual’ for the existing corporate or SME player. You should know your current marketplace well, know your customers intimately and fully understand the IP (intellectual property) and the USPs (unique selling points) that your products have over the competition.
You should also know and regularly monitor the general direction of travel of the industry, the trends, the technology roadmaps, price points and any changes in legislation (or indeed be part of the legislative process).
Often, the key to success is aligning your technology road map(s)/cycles with your clients’ market needs. So, ensure you actively align your processes, procedures and services so you become an indispensable partner rather than a supplier.
Elephant traps here are more often than not a new entrant buying themselves into the market, a competitor making an acquisition to buy a market share or an industry consolidation.
In all cases, I’d suggest the biggest elephant trap is complacency, brought about by you or your clients not monitoring the direction of travel of the industry and/or not reacting fast enough to shifting trends.
This article first appeared in the November issue of The Manufacturer magazine. Click here to subscribe
B New technology – within a known market
New technology being applied to a known market can be traced back hundreds of years, and includes inventions such as the Spinning Jenny by James Hargreaves in 1764 and the steam engine by James Watt in 1776.
More recently, 3D printers, 3D scanning and virtual reality are all technologies that are disrupting industries, changing the way products are conceived, manufactured, and used or consumed.
These new technologies typically shorten production cycles, enhance productivity and reduce costs, and in so doing displace industries or sectors that are complacent and/or protected.
‘Luddite’ has become a blanket term to describe people who dislike new technology. It originally applied to weavers and textile workers who objected to the increased use of mechanised looms and knitting frames – replacing trained artisans who had spent years learning their craft.
The new Luddites are probably going to come as a result of changes caused by the deployment of artificial intelligence (AI), initially replacing ‘low-value’ repetitive tasks with white-collar workers such as telesales staff, marketers or even lawyers and accountants.
The elephant traps here depend on whether you are the buyer or seller. If you are buying, the trap is one of technology adoption, timing and standards. Adopt too early and the standards aren’t set, you risk buying into a fledging technology – possibly the wrong one.
Buy too late and you risk competition leapfrogging you- or even new entrants in your market taking your customers.
If you are selling, the issue is finding the right early adopters, the right partners who see the benefits of the technology, the way it can help their business succeed, but just as important, partners who are prepared to be your advocates.
Too often I’ve seen cases where sales are rushed into closing deals, with exclusivity agreements, which in turn limit your growth in being able to showcase to others in the industry.
My preference when buying or selling is to always keep a close eye on new developments, attend trade shows, read the trade press and really understand what is happening within the wider ecosystem. In that I’d include universities, our Catapult network, trade bodies and suppliers.
Keep abreast of what your customers are buying and using – and understand what’s happening with their customer’s customer. In short, as a business, you should be continuously inquisitive.
Check out Paul’s other articles:
- In conversation with the maverick entrepreneur behind Riversimple
- Circular Economy: What can manufacturers learn from Sainsbury’s approach?
- Ian Callum: In conversation with an automotive design legend
- How Design Thinking helped create one of Europe’s fastest growing tech businesses
- Rich Energy: Using Design Thinking to accelerate a global brand
C Known technology – within new markets
This opportunity space has traditionally been the remit of marketing, product research, and/or sales, where current technology explores adjacent markets and geographies, or pioneers go into completely unknown or unproven territories.
While it sounds crazy, I’ve even met entrepreneurial inventors (and corporations) who have created and adapted current technology with little or no market knowledge, on the basis of ‘build it and they will come’.
There are many elephant traps that I’ve come across, a prime one being assumptions; that’s because if technology performs well in the home market/sector it is assumed it will perform the same in the adjacent market – or a new territory.
History is littered with UK companies who went into the US or Australia believing we spoke a common language; therefore, the customer needs would be the same or similar, only to discover the markets are very different in scale, complexity and legality.
This ‘language’ barrier equally applies when moving between sectors in the same territory. The requirements for an automotive OEM are very different from an electronics OEM.
A second elephant trap worth mentioning is using licencing or franchising models as an ‘easy’ route to geographic or sector expansion. I have come across licensees who spent five years building a brand only to have it taken back and the brand owner use all the pioneering work to enter the market themselves.
On the flip side, I’ve seen licensors who didn’t get the ‘pull’ through they were promised, or the licenced product being used as a ‘Trojan horse’ to sell their own technology, and in one instance seen a situation where the technology itself was re-engineered and re-patented.
My suggestion in all these cases is ‘the devil is in the detail’. Where possible, ensure you protect your IP and work with or recruit subject matter experts who have first-hand experience in the sectors or markets, and take it slowly.
D New technology – within new markets
This is the most exciting and challenging opportunity space; it’s where breakthroughs occur, ones that change lives or industries – or both! It’s also a place where history shows us again and again that being the first to market, having the best technology, but having the wrong business model can be fatal.
So, get it right, protect and exploit your IP and the rewards can be massive; get it wrong and the balance sheet, the shareholders and employees will all suffer.
There are a number of fundamental ‘what and why’ questions I ask when looking at technologies, products, services or solutions, which fit into this ‘new-new’ category quadrant.
By answering these honestly, listening and acting on the advice of subject matter experts, early adopters and a cross-functional team you will be well placed to avoid at least some of the elephant traps.
What’s the addressable market…now?…and in the future?
While the size of the ultimate prize is important, I’ve seen too many business plans which say, ‘the UK/EU/global market is worth billions…and we only need 1%!’
Start the other way around – how many early adopters do you need to build a representative sample in Year One? How much ‘share of their budget’ can be achieved? How much uplift in their performance and their customers’ performance do you enable?
What habit, service or problem are you actually solving?
Chances are, the new technology will solve a current problem, cheaper, faster, better, lighter, smaller, greener… But how much better is it over current solutions?
Unless it’s at least 20% on the KPIs (key performance indicators) then it’s probably not going to make an immediate impact or make your customers leap to make the change.
Don’t forget, every sector has rules, regulations, testing regimes and an inbuilt inertia against new entrants. Making any change is itself the first hurdle.
What needs to be true for change to occur?
It generally takes an ecosystem to support new technology introduction. How do we get trials, proof points or white papers published? Who do you need to influence, convince or be an advocate? What regulations need to change or adapt?
This is clearly a monster topic with huge implications for each industry and each technology sector. My Boston Matrix may be somewhat simplistic, but it captures some of the key topics and provides a stimulus for debate and above all avoidance.
One final point that shouldn’t be overlooked is that great leadership, great navigation and map reading skills are vital in avoiding these traps in the first place!
*Images courtesy of Depositphotos.