I was reading Ed Dale’s blog the other day, and this term popped into my mind. I don’t think that I’ve heard it before, so I’m going to coin it…
“Market Innovation”
So what is Market Innovation and why am I writing about it?
Market Innovation is a 5-step process:
- Start by looking at a large market.
- Identify a segment of that market that has a common, unfulfilled need.
- Pivot the market segment – Innovate a revolutionary product that spins that market segment 180 degrees with your product as the pivot point.
- Develop a community of consumers around your product by selling complimentary products to your consumer base.
- Control and Grow your New Market – Through shaping the market segment and becoming the pivot, you have created an entire new market around your products. You now control the market. Your mission at this point is to keep them happy and grow your market.
Let me show you an example…
Before Apple came out with the iPod, there were lots of MP3 players around. Most were cheeply made, were missing a lot of features, and required you to convert your own CDs to MP3 so that you could load them on your player.
The iPod changed all that. In late 2001, they completely changed the MP3 player market by solving those problems for the people who were unhappy with their current MP3 players or who wanted an MP3 player but were scared off by the other players at that time.
The iPod was a very nice-looking, easy to operate and well-featured MP3 player. Now the features and design of the iPod alone really grabbed the market’s attention, but I believe that the true market innovation happened with the iTunes software.
iTunes was Apple’s Pivot
iTunes made it REALLY easy to get songs onto the iPod, without having to go to the store, buy a CD, bring it home and convert it to MP3. You could download them directly from Apple to your iPod. Another problem solved.
The Podcast Built the Community
They then built the community of rabbid fans with the invention of the Podcast. By allowing users to syndicate their own MP3 recordings to anyone with iTunes, Apple extablished itself as the center of the internet audio consumer market. By becoming the conduit of music and information, iTunes completely took over the MP3 market as the player-of-choice for most people.
The success of iTunes, in my opinion, is what really is keeping the iPod ahead of the competition. iTunes has become the center of the MP3 market, and through market innovation, has grown the market from a small niche into the main stream.
Apple is still innovating with the iPod and iTunes and finding new things to sell to its consumers. iTunes is regularly being updated and new features are added.
They now have a 75% market share of the MP3 player market, and iTunes has become the 4th largest music retailer.
So what does this mean for you?
I could go through a similar process with every current market leader & long-lived successful product. Google, Microsoft, Wal-Mart, Lowes, the Apple Macintosh, etc.
Market Innovation is at the core of every market leader, but you don’t have to be the leader in order to start. Nor do you have to the be market leader in order to pivot the market. Each of these companies started small at one point, and they found the market that they could pivot. Once you pivot the market, even if it is a small niche, you become the center of it.
At its simplest, I really see it as a 5-step process:
- Start by looking at a large market.
- Identify a Segment of that market that has a common, unfulfilled need.
- Pivot the Market Segment.
- Develop a Community of Consumers.
- Control and Grow your New Market.
I am putting together a video series on how you can do this in your own market, from market research to launching your product. If you would like to get on the insider’s list and learn how to innovate and control your own market, watch the video at Submerged Solutions:
What are your thoughts?
-Kris