What Do You Sell When No One Is Buying?
I was sitting in a Starbucks SBUX -0.94% drinking a red eye. It was going to be a long day and I needed to be prepared; the client I would be visiting was struggling to find a product-development focus. They had developed numerous products, always thinking they were close to a breakthrough, only to discover that something was missing when it came time to put them in the market. Either the product missed the client need, or the positioning was off, or the product didn’t achieve the success they had hoped for.
I was afraid that something more insidious was at play.
My client’s industry was undergoing a huge demographic shift: long-term customers weren’t willing to hand over money the way they used to. The few new customers sought lower-cost—or no-cost—alternatives. My client could ride the product line they had—likely into the ground—or they could take a new approach to their market and think about their offerings and business model in a completely different way.
We know what we want and we want something more
The recent public altercation over the theory of disruptive innovation led to examination and reflection on this concept developed by Harvard Business School professor Clayton Christensen. What most people missed was that disruption happens, whether it’s planned or not.
Consumer tastes do not shift wildly; an assessment of family purchasing patterns in the United States noted that the number of consumer products regularly purchased is less than 150. When consumers do shift purchasing patterns, it’s often based on large-scale disruptive shifts in taste, technology and thinking. How your company responds to those shifts may determine your future survival.
Consider the recent ecosystem offerings by Google GOOGL +0.92% with Android Wear and Amazon with the Fire Phone. Both companies recognize that technological advances are not device-specific—they’re directly related to the "Internet of things.” Pervasive connectivity across devices allows companies that park themselves in or near the center of a user experience to thrive. The quality of the user experience yields a competitive advantage, not the lone product or service.
Share and share alike
If customers aren’t buying but still have the same needs, what are they doing instead to meet those needs? One thing might be using the sharing economy.
Several years ago, to celebrate my wife’s birthday, I surprised her with a trip to Venice. Not wanting to stay in a hotel and looking to experience the city beyond St. Mark’s Square, I tried my luck with Airbnb, finding a room with private bath in a great top-floor apartment in the heart of the Venetian Arsenal district. Our hosts were gracious and took amazing care of us, offering advice and counsel and giving us as much space as we wanted. We experienced Venice in a way few tourists get to and created a lifetime of memories.
Sharing a residence is only one of the many ways to participate in the sharing economy. Nearbox deems themselves an Airbnb for storage, creating an online marketplace for unused space; the self-storage industry in the United States generated more than $24 billion in annual U.S. revenues (2013 estimate). For a rustic holiday experience (in California only at the moment, alas), there’s HipCamp, a startup offering access to a sharing community of bookable campsites. Concerned with personal productivity? SpareChair provides a community for those who work from home or have extra room in their workspace, so members can connect and co-work in each other’s workspaces be it home, office or studio.
The sharing economy is not based on acquisition or ownership but on connection, utilization and meeting temporary needs through compelling and easy experiences.
Life-sized Mousetrap at MakerFaire 2011
Better build it yourself
Consider 3D Hubs, who provide access to a network of nearly 6,000 3D printers and a two-day turnaround on production. They highlight another shift in the marketplace—the rise of the do-it-yourself economy.
While HGTV and its like play to the inner construction (and yes, demolition) expert in us all, teaching us the how-to and what-not-to-do of home improvement, the Maker Movement is a completely different kind of DIY culture. The centerpiece is the Maker Faire, a mad mash-up of science fair, county fair, and music festival without the music. Maker Faire brings together a whole range of builders, tinkerers and creators to show off what they’ve made and share what they’ve learned. :
