6 ms·

Harbingers of Failure [pdf]

58 points by isp 11y ago

virmundi 11y ago
Didn't Innovator's Dilemma cover this? The cable shovel customers said, "Ya, bigger shovels! Screw tiny hydraulics!" All the while hydrolics kept getting better. Then the bottom feel out?
- marcosdumay 11y ago
  Well, no. Innovator's Dilemma is about successful products, not failures. The cable shovels were very successful, until they suddenly stopped being.
  - Animats 11y ago
    The problem there, which The Innovator's Dilemma didn't cover, is that seals were a huge problem for hydraulics until the invention of Neoprene synthetic rubber around 1930. Until then, hydraulics always leaked. Somebody built a hydraulic excavator around 1880, but that was a dead end. Success didn't come until 1948 or so. Pumps, valves, and hydraulic cylinders that don't leak are a post-WWII technology. Natural rubber doesn't tolerate oil. All the alternative to it (cloth packing, oiled leather, etc.) are worse, and hopeless at high pressures. This is an example of something that just doesn't work with natural materials.
    - jacquesm 11y ago
      Many things are like that. Tiny little steps in materials science suddenly enable a whole new field to come into play. It would be interesting to see a breakdown for many items that we take for granted to the key materials science breakthroughs that enable their functioning.
    - paulajohnson 11y ago
      While this is likely true it doesn't detract from Christensen's point, which is that the steam shovel companies went out of business because they couldn't switch. The steam shovel companies saw hydraulics as toys, or a sideline, or as sweeteners to throw in with a big steam shovel contract. They didn't understand how to exploit hydraulics when they finally developed enough to move earth by the ton more cheaply than large steam shovels.
kazinator 11y ago
That is fascinating. These customers are sort of like a high pass filter. They react to a step (something new) and generate a spike (uptick in sales that doesn't last). They don't care that they are buying a failed product because "failed" only means "didn't sell to a lot of people". The product is actually okay, and they bought it because it's new. Might it be possible that the pattern of buying failed products is self-reinforcing? Failed products keep disappearing off the shelves. So the people who started buying them have to look for something else. This switches their brains into "look for new stuff" mode, so they find new stuff beyond merely replacing what disappeared. Now, perhaps the problem is that most new stuff fails, so it is easy to get into this pattern. Just because you are into buying new stuff and it keeps disappearing doesn't mean you're a predictor for failed products. Your purchase patter just isn't good predictor for what will become popular.
- skewart 11y ago
  The paper is looking at these types of consumers in aggregate, effectively at the proportion of a product's sales that come from each group. These "harbinger" consumers are only harbingers if, collectively, they make up a disproportionately large percentage of sales. Another way to think about it is that what you really should care about is not the number of sales, but instead the the number of sales to people who have similar purchasing patterns to the typical consumer you hope to reach. What's interesting is that the authors are arguing that sometimes having a lot of early sales is actually worse than having only a few. It's a problem if that large number of sales includes a disproportionately high percentage of "flop affinity" consumers. It would be better to have a small number of sales, but also with low percentage of high "flop affinity" consumers. The intuition behind this is perhaps that in order to reach so many of a relatively rare consumer type - the harbinger of failure consumer - you must have also reached a lot of the more typical consumers, and they decided your product isn't appealing to them. On the other hand if you have low sales, but only a small percentage of these sales is to harbinger consumers then presumably your product is appealing to mainstream consumers, and your sales problem can be fixed with relatively straightforward marketing and distribution tactics. Maybe the tl;dr could basically just be: not all early sales are the same, so understand who your buyers are and how representative their purchasing habits actually are of the market you're trying to reach.
chipuni 11y ago
Did anyone proofread this PDF before they sent it out? I couldn't read the equations.
- Animats 11y ago
  This has to be an early draft. There are lines such as "Figure 2 about here".
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58 points by isp 11y ago

Didn't Innovator's Dilemma cover this? The cable shovel customers said, "Ya, bigger shovels! Screw tiny hydraulics!" All the while hydrolics kept getting better. Then the bottom feel out?

marcosdumay 11y ago
Well, no. Innovator's Dilemma is about successful products, not failures. The cable shovels were very successful, until they suddenly stopped being.
- Animats 11y ago
  The problem there, which The Innovator's Dilemma didn't cover, is that seals were a huge problem for hydraulics until the invention of Neoprene synthetic rubber around 1930. Until then, hydraulics always leaked. Somebody built a hydraulic excavator around 1880, but that was a dead end. Success didn't come until 1948 or so. Pumps, valves, and hydraulic cylinders that don't leak are a post-WWII technology. Natural rubber doesn't tolerate oil. All the alternative to it (cloth packing, oiled leather, etc.) are worse, and hopeless at high pressures. This is an example of something that just doesn't work with natural materials.
  - jacquesm 11y ago
    Many things are like that. Tiny little steps in materials science suddenly enable a whole new field to come into play. It would be interesting to see a breakdown for many items that we take for granted to the key materials science breakthroughs that enable their functioning.
  - paulajohnson 11y ago
    While this is likely true it doesn't detract from Christensen's point, which is that the steam shovel companies went out of business because they couldn't switch. The steam shovel companies saw hydraulics as toys, or a sideline, or as sweeteners to throw in with a big steam shovel contract. They didn't understand how to exploit hydraulics when they finally developed enough to move earth by the ton more cheaply than large steam shovels.

kazinator 11y ago

That is fascinating. These customers are sort of like a high pass filter. They react to a step (something new) and generate a spike (uptick in sales that doesn't last). They don't care that they are buying a failed product because "failed" only means "didn't sell to a lot of people". The product is actually okay, and they bought it because it's new. Might it be possible that the pattern of buying failed products is self-reinforcing? Failed products keep disappearing off the shelves. So the people who started buying them have to look for something else. This switches their brains into "look for new stuff" mode, so they find new stuff beyond merely replacing what disappeared. Now, perhaps the problem is that most new stuff fails, so it is easy to get into this pattern. Just because you are into buying new stuff and it keeps disappearing doesn't mean you're a predictor for failed products. Your purchase patter just isn't good predictor for what will become popular.

skewart 11y ago
The paper is looking at these types of consumers in aggregate, effectively at the proportion of a product's sales that come from each group. These "harbinger" consumers are only harbingers if, collectively, they make up a disproportionately large percentage of sales. Another way to think about it is that what you really should care about is not the number of sales, but instead the the number of sales to people who have similar purchasing patterns to the typical consumer you hope to reach. What's interesting is that the authors are arguing that sometimes having a lot of early sales is actually worse than having only a few. It's a problem if that large number of sales includes a disproportionately high percentage of "flop affinity" consumers. It would be better to have a small number of sales, but also with low percentage of high "flop affinity" consumers. The intuition behind this is perhaps that in order to reach so many of a relatively rare consumer type - the harbinger of failure consumer - you must have also reached a lot of the more typical consumers, and they decided your product isn't appealing to them. On the other hand if you have low sales, but only a small percentage of these sales is to harbinger consumers then presumably your product is appealing to mainstream consumers, and your sales problem can be fixed with relatively straightforward marketing and distribution tactics. Maybe the tl;dr could basically just be: not all early sales are the same, so understand who your buyers are and how representative their purchasing habits actually are of the market you're trying to reach.

chipuni 11y ago

Did anyone proofread this PDF before they sent it out? I couldn't read the equations.

Animats 11y ago
This has to be an early draft. There are lines such as "Figure 2 about here".

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