Posts Tagged ‘New Product Development’

The Death of Commoditization. The Birth of the Small Business

October 20, 2009

by joseph.young.2009

Image Source: Wired.com

Image Source: Wired.com

In today’s society, there is the belief that “free is good.” I have this belief as well, but I do think there are times when the saying isn’t always true. A situation that stands out for me is new products in the marketplace. When you see or hear about a product from a friend, in the news, or by any other means, what you’re hearing a someone’s invention. It is something they (the company) created by trying to understand their customer (often themselves) and making a product that serves their customer. That is the essence of new product development. You find a need in the market, and then you try to fill it with a product that you think the consumer would enjoy and purchase. And you, as the creator would be rewarded. In today’s society, that reward is financial, social, or some other high value asset.

Source: stock.xchang

Source: stock.xchng

So back to the inventor. This inventor has created something that they think you will like. And by buying their product, you say, “I like your product and I will support you.” What makes you decide to buy it? Maybe you tried it. Maybe a trusted friend recommended it to you. By some marketing initiative, you became aware of the product and decided that you wanted it enough to be willing to pay for it.

Source: Stock.xchng

Source: Stock.xchng

The problem with commoditization is that it drives down the quality of the product as the price drives towards zero. One example of this direct relationship between quality and price can be seen in toilet paper. Toilet paper is, in essence, free. If you wanted to, you could get toilet paper free for the rest of your life and never have to pay for it. Now I don’t know where to get reliably source of free toilet paper from, but a quick search would answer that question. The bigger point is that even in a market with free products, people pay. And people will pay a fair amount for high quality toilet paper. The point is that a commoditized product is often of poor quality, so the majority of consumers will pay for a higher quality product. You can pay with money, as in toilet paper, or with information, as in Google.

Source: stock.xchng

Source: stock.xchng

My proposal to you, the consumer, is to consider, “Why would somebody create something in a commoditized market?” Are they trying to make a quick buck? Or are they making something they believe in and think will improve your life. If you believe the reason they made the product is to make your life better, then I ask you to buy it. By buying that product, you are supporting the inventor’s dream. You are an early adopter. You buy into their dream product. The current iteration of the product may not be your dream product, but by supporting them, you give them another chance to make something better. You keep their company in the race. By selecting a commoditized version of the product, you don’t give them the chance to even try again. Aren’t we supposed to support smart risk taking? Without such, society wouldn’t grown and flourish.

Did you Hulu it?

November 17, 2008

by joseph.young.2009

wikipedia.org

Source: wikipedia.org

Two things recently happened to me relating to Hulu. The first happened last night when I was talking to a classmate at Rady about the most recent episode of The Office, and a funny bit about “microgement.” The gist of the conversation went as follows:

Joseph, it sounded like Jim just messed up the line in the show.


Did you Hulu it? I think he intentionally made up the word.


Did you just call me a name?

My classmate had not heard of Hulu yet. But shortly afterwards, we were able to confirm that it was “microgement” and not “micromanagement.” But how is this different than trying to look it up you YouTube? 1. It’s legal, the show is posted by NBC, and Hulu created tools to allow sharing clips via e-mail and social networks easy. Very easy. 2. The video quality is great. I can’t emphasize this enough. What makes Hulu stand out from YouTube is that the production and video quality is high. Some people thought that YouTube meant the end of television. Partially because you could watch illegally uploaded television there, but partially because people thought that there was enough good user generate content to overwhelm network television. They were wrong. As I’ve emphasized before, it just means that crappy content goes to the wayside, and great content rises to the top. Whether it’s in games, movies, television or any other form of entertainment.

The second interesting tidbit about Hulu is that it’s on the tipping point of going huge. Becoming genericized. I’m definitely not the first person to say this. But within the span of 12 months, Hulu has gone from the top 100,000 websites in the world, to the top 400. There’s a shift in the consumer’s mindset who now considers Hulu as a network rather than a portal. You can watch what you want, when you want (some limitations), and in great quality. And all you have to do is sit through a couple of 30 second commercials.

While I’m on this topic, there are some people that are understanding how to advertise on Hulu, and other who do not quite get it yet. The one who gets it is the team running Christina Aguilera‘s advertising campaign. Tradition television take a commercial and blasts it at the consumer over and over again. We’re smarter than that (at least we think). So if you play the same commercial over and over again, I’m going to take a 30 second break between segments rather than a 2 minute break, or fastforward. Christina’s crew created 4 separate 30 second commercials that formed a single 2 minute commercial that was unique and kept me interested. I’m much less likely to go on a bio break if I know the commercial is a continuation of a whole mini-show that happens to be a commercial.

Hulu did television on the internet right. Other’s are sure to follow with competitors, or if they’re smart, partnerships with Hulu. There’s already great technology and leadership behind them. It’d only be smart to build your own site if you have deep pockets.

Innovating in Established Markets: Candy Buckets

October 23, 2008

by joseph.young.2009

With Halloween around the corner, I thought I’d treat our readers to a new segment. I get really excited about innovation. I guess that’s why I work in the technology sector. But innovation is more than Web 2.0 and Software-as-a-Service. It’s about finding a solution to a problem, new or old. It’s always amazing to see products stand out in established markets where people believe there’s no more room for growth because one company has significant market share. It’s partially an underdog mentality, but also the belief that you can do better than what’s out there. I think that’s one of the biggest takeaways from the New Product Development course at Rady.

While shopping for halloween costumes, I came across the candy buckets that kids usually tote around to each house, holding their treasures. Growing up, these things were pretty basic. An orange plastic bowl with a black strap. I was pleasantly surprised to see that someone improved upon the old design. The pain with the old products were their lack of sturdiness, as well as the difficulty in emptying out the candy at the end of the night. The solution? A more durable bucket with an upsidedown hing to pour the candy out the bottom. Brilliant! The photos below show a new Elmo candy bucket that conveniently opens at the bottom.

Happy Halloween!

SuperSaiYoung@flickrSource: SuperSaiYoung@flickr

SuperSaiYoung@flickr

Source: SuperSaiYoung@flickr