Don’t be a Loser – What Product Managers Need to Know about Product Ecosystems: Product Development and Innovation Lesson from the News

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Product Development, Management, and Innovation Training:  Product EcosystemLet’s test your memory. What do you remember, if anything, about the Segway? The Sony Reader for e-books? Apple’s Newton PDA?

There is a good reason why most people have difficulty recalling much about these products—although they were great innovations, they became market failures because the product ecosystem was not completely developed.


Product ecosystem failures

Ron Adner, a Dartmouth College business professor, argues that great innovations can and do fail when product innovators don’t identify the whole environment into which their product is launched—its ecosystem.

Adner’s book, The Wide Lens: What Successful Innovators See that Others Miss, and his video summarizing key points, teach us that great innovators often have a blind side—they don’t use a wider lens to account for what Adner calls “critical dependencies”—relationships they have with their product partners.

The idea is that innovations happen within a collaborative ecosystem which has to be taken into account. In the case of the failed Sony Reader, for example, Sony neglected to line up the book publishing industry as an ally—a mistake Amazon did not make when it launched its successful Kindle e-reader that made it easy for users to download ebooks.

The iPod is another example of an ecosystem success for similar reasons as the Kindle. You may recall that the initial iPod received a lukewarm reception in the market. Sure, it was cool to put “1,000 songs in your pocket,” but it was not until iTunes was released that demand for the iPod grew rapidly.

Look at what happened to the Segway I mentioned earlier. It turns out that several cities banned the product from sidewalks. The Segway inventor did not consider the impact that the product would have on crowded city streets.


The product development ecosystem lessons in a nutshell

  1. Look at the bigger picture that needs to be assembled, and
  2. Be very clear on how you are going to assemble it. Ask yourself, do we have what it takes to build what has to be built around that innovation?

A great example of an innovation that worked despite a challenging ecosystem is D-Rev’s medical equipment for developing countries. The innovators took their users’ entire ecosystem into account—and redesigned the market and the distribution for their product to meet the real-life, daily conditions in developing countries. You can learn more about this product ecosystem success here.

Adner concludes his video by underscoring the lesson: “Everyone needs to walk away a winner. Otherwise the innovator walks away as a loser.”

You’re not a loser – next time you are involved in developing, managing, or innovating a product, consider what ecosystem elements are required to create a complete user experience for your customers.

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