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From: Steven Sinofsky
To: Jeffrey Epstein O> 
Subject: Fw: [New post] Conversation #38— disrupt or die 
Date: Tue, 14 May 2013 02:07:49 +0000 
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Conversation #38— disrupt or die 
by Steven Sinofsky 
I glthCAM164QK 
Anyone worth their salt in product development knows that listening to 
customers through any and all means possible is the means to 
innovation. Wait a minute, anyone worth their salt in product 
development knows that listening to customers leads to a faster horse. 
Deciding your own product choices within these varying perspectives is perhaps the 
seminal challenge in product development, tech products or otherwise. This truly is a 
tyranny of or but one in which changing the rules of the game is the very objective. 
In this discussion, which is such a common dialog in the halls of HBS as well tech 
companies everywhere it should probably be a numbered conversation (for this blog let's 
call this Conversation #38 for shorthand—disrupt or die). 
For a recent discussion about why it is so difficult for large companies to face changes in 
the marketplace, see this post Why Corporate Giants Fail to Change. 
"Disrupt or die" or "disrupt and die"? 
Failure to evolve a product as technologies change or as customer scenarios change is 
sure to lead to obsolescence or elimination from the marketplace. It is difficult to go a day 
in tech product development without hearing about technology disruption or "innovator's 
dilemma'. The biggest fear we all have in tech is failing to keep up with the changing 
landscape of technologies and customers, and how those intersect. 
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At the same time, hopefully we all get to that lucky moment when our product is being 
used actively by customers who are paying. We're in that feedback loop. We are 
improving the product, more is being sold, and we're on a roll. 
That's when innovation over time looks like this: 
Incremental 
In this case as time progresses the product improves in a fairly linear way. Listening to 
customers becomes a critical skill of the product team. Product improvements are touted 
as "listening to customers" and things seem to go well. This predictability is comforting for 
the business and for customers. 
That is, until one day when needs change or perhaps in addition a new product from a 
competitor is released. Seemingly out of nowhere the great feedback loop we had looks 
like it won't help. If we're fortunate enough to be in tune to changing dynamics outside our 
core (and growing) customer base we have time to react and change our own product's 
trajectory. 
That's when innovation looks like this: 
New Product 
This is a time when the market is receptive to a different point of view, and a different 
product -- one that redefines, or reimagines, the category. Sometimes customers don't 
even realize they are making a category choice, but all of a sudden they are working 
differently. People just have stuff to get done and find tools that help. 
We're faced with what seems like an obvious choice—adjust the product feature set and 
focus to keep up with the new needs of customers. Failing to do so risks losing out on new 
sales, depth usage, or even marginalization. Of course features/capabilities is a long list 
that can include price, performance, battery life, reliability, simplicity, APIs, different 
integration points or service connections, and any other attributes that might be used by a 
new entrant to deliver a unique point of view around a similar scenario. 
Many folks will be quick to point out that such is only the case if a new product is a 
"substitute" for the product people are newly excited about. There is truth to this. But there 
is also a reality shown time and time again which gets to the heart of tech bets. It is almost 
always the case that a new product that is "adjacent" to your product has some elements 
of more expensive, more complex in some dimensions, less functional, or less than ideal. 
Then what seems like an obvious choice, which is to adjust your own product, quickly 
looks like a fool's bet. Why would you chase an inferior product? Why go after something 
that can't really replace you? 
The examples of this are too numerous to count. The iPhone famously sucked at making 
phone calls (a case where the category of "mobile phone" was under reinvention and 
making calls turned out to be less important). Solid State storage is famously more 
expensive and lower capacity than spindle drives (a case where the low power, light 
weight, small size are more valued in mobile devices). Of course tablets are famously 
unable to provide apps to replace some common professional PC experiences (a case 
where the value of mobility, all day battery life, always connected seem more valued than 
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a set of platform capabilities). Even within a large organization we can see how limited 
feature set cloud storage products are being used actively by employees as "substitutes" 
for enterprise portals and file shares (a case where cross-organization sharing, available 
on the internet, and mobile access are more valued than the full enterprise feature set). 
The list goes on and on. 
As product managers we all wish it was such a simple choice when we face these 
situations. Simply leapfrog the limited feature set product with some features on our 
profitable product. Unfortunately, not every new product that might compete with us is 
going to disrupt us. So in addition to facing the challenges of evolving the product, we also 
have to decide which competitors to go after. Often it takes several different attempts by 
competitive products to offer just enough in the way of new / different approaches to begin 
to impact an established product. 
Consider for example of how much effort the Linux community put into desktop Linux. And 
while this was going on, Android and iOS were developed and offered a completely 
different approach that brings new scenarios to life. A good lesson is that usually a head-
on alternative will quite often struggle and might even result in missing other disruptive 
technologies. Having a unique point of view is pretty important. 
The reality of this situation is that it is only apparent in hindsight. While it is going on the 
changes are so small, the product features so minimal, and the base of the customers 
choosing a new path so narrow that you don't realize what is going on. In fact, the new 
product is also on an incremental innovation path, having attained a small amount of 
traction, and that incremental innovation rapidly accumulates. There is a tipping point. 
That is what makes acting during such a "crisis" so urgent. Since no one is first all the time 
(almost by definition when you're the leader), deciding when and how to enter a space is 
the critical decision point. The irony is that the urgency to act comes at a time when it 
appears from the inside to be the least urgent. 
Choosing to innovate means accepting the 
challenges 
We've looked at the landscape and we've decided as a team that our own product needs 
to change course. There is a real risk that our product (business) will be marginalized by a 
new entry adjacent to us. 
We get together and we come up with the features and design to go after these new 
scenarios and capabilities. 
The challenge is that some of what we need to do involves changing course—this is by 
definition what is going on. You're Apple and you decide that making phone calls is not the 
number 1 feature of your new mobile phone or your new tablet won't run OS X apps. 
Those are product challenges. You also might face all sorts of challenges in pricing, 
positioning, and all the things that come from having a stable business model. For 
example, your competitor offers a free substitute for what you are selling. 
The problem is your existing customers have become conditioned to expect improvements 
along the path we were traveling together. Worse, they are by definition not expecting an 
"different" product in lieu of a new version of their favorite product. These customers have 
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built up not just expectations, but workflows, extensions, and whole jobs around your 
product. 
But this is not about your existing and best customers, no matter how many, it is about the 
foundation of your product shifting and you're seeing new customers use a new product or 
existing customers use your product less and less. 
Moving forward the product gets built and it is time to get it into market for some testing or 
maybe you just release it. 
BOOM! 
All that work your marketing team has done over the years to establish what it means to 
"win" in the space that you were winning is now used against you. All the "criteria" you 
established against every competitor that came along are used to show that the new 
product is not a winning product. Except it is not winning in the old way. What you've done 
is become your own worst enemy. 
But even then, the new way appears to be the less than optimal way—more expensive, 
less features, more clicks, or simply not the same at doing things the product used to do. 
The early adopters or influential users (that was an old term in the literature, "IEU" or 
sometimes "lead user") are immediately taken aback by the change in direction. The 
workflows, keystroke memory, add-ins, and more are just not the same or no longer 
optimal--there's no regard for the new scenarios or capabilities when the old ones are 
different. Worse, they project their views across all customer segments. "I can't figure this 
out, so imagine how hard it will be for my parents" or "this will never be acceptable in the 
enterprise" are common refrains in tech. 
This happens no matter who a product is geared towards or how complex the product was 
in the first place. It is not how it does anything but the change in how it did things people 
were familiar with. This could be in user experience, pricing, performance, platform 
requirements or more. 
You're clearly faced with a set of choices that just don't look good. In Lean Startup Eric 
Ries talks in detail about the transition from early users of a new product to a wider 
audience. In this context, what happens is that the early users expect (or tolerate) a very 
different set of features and have very different expectations about what is difficult or easy. 
His conclusion is that it is painful to make the transition, but at some point your learning is 
complete and it is time to restart the process of learning by focusing on the broader set of 
customers. 
In evolving an existing product, the usage of a pre-release is going to look a lot like the 
usage of the current release. The telemetry proves this for you, just to make this an even 
more brutal challenge. In addition, because of the years of effort the enthusiasts put into 
doing things a certain way and all that work establishing criteria for how a product should 
work, the obvious thing to do when testing a new release is to try everything out the old 
release did and compare to the old product (the one you are changing course of) and then 
maybe some new stuff. This looks a lot like what Eric describes for startups. For products 
in market, the moment is pretty much like the startup moment since your new product is 
sort of a startup, but for a new trajectory. 
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Remember what brought us here, two things: 
• The environment of usage or business around the product was changing and a bet 
was made that changes were material to the team. With enough activity in the market, 
someone will always argue that this change is different and the old and new will 
coexist and not cannibalize each other (tell that to PalmPilot owners who swore 
phones would be separate from calendar and contacts, or GPS makers who believe 
in stand-alone units, or...). 
• A reminder that if Henry Ford had asked customers what they wanted from a car they 
would have said a faster horse. The market was conditioned to ask for and/or expect 
improvements along a certain trajectory and no matter what you are changing that 
trajectory. 
All the data is flowing in that shows the new product is not the old product on the old path. 
Not every customer is interested in doing new things, especially the influential testers who 
generally focus on the existing ways of doing things, have domain expertise, and are often 
the most connected to the existing product and all that it encompasses. There is an irony 
in that for tech these customers are also the most tech-savvy. 
Pretty quickly, listening to customers is looking exceedingly difficult. 
If you listen to customers (and vector back to the previous path in some way: undo, 
product modes, multiple products/SKUs, etc.) you will probably cede the market to the 
new entrants or at least give them more precious time. If technology product history is any 
guide, pundits will declare you will be roadkill in fairly short order as you lack a strategic 
response. There's a good chance your influential customers will rejoice as they can go 
back and do what they always did. You will then be left without an answer for what comes 
next for your declining usage patterns. 
If you don't listen to customers (and stick to your guns) you are going to "alienate" folks 
and cede the market to someone who listens. If technology product history is any guide, 
pundits will declare that your new product is not resonating with the core audience. 
Pundits will also declare that you are stubborn and not listening to customers. 
All of this is monumentally difficult simply because you had a successful product. Such is 
the price of success. Disrupting is never easy, but it is easier if you have nothing to lose. 
Many folks will be quick to say that new products are fine but they should just have the old 
product's way of doing things. This can seem like asking for a Prius with a switch to turn 
off the battery (my 2002 Prius came with a training DVD, parking attendant reference card, 
and more!). There are many challenges with the "side by side" approach. The most 
apparent is that it only delays the change (meaning delays your entry into the new market 
or meeting of new scenarios). Perhaps in a world of cloud-services this is more routine 
where you have less of a "choice" in the change, but the operational costs are real. In 
client code/apps the challenge becomes very quickly doing things twice. The more 
complex the changes are the more costly this becomes. In software nothing is free. 
Product development is a social science. 
People and time 
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In this numbered conversation, "disrupt or die" there are a few factors that are not often 
discussed in detail when all the debates happen. 
First, people adapt. The assumption, especially about complex tech products, is that 
people have difficulty or lack of desire to change. While you can always overshoot the 
learning people can or are willing to do, people are the most adaptable part of a system. 
One way to think about this is that every successful product in use today, those that we all 
take for granted, were introduced to a customer base that had to change behavior. We 
would not be where we are today without changing and adapting. If one reflects, the 
suboptimal change (whether for the people that are customers or the people running a 
business) is apparent with every transition we have made. Even today's tablets are 
evidence of this. Some say they are still for "media consumption" and others say they are 
"productivity tools". But behind the scenes, people (and developers) are rapidly and 
actively changing and adapting to the capabilities of tablets because the value proposition 
is so significantly improved in some dimensions. 
Second, time matters. Change is only relative to knowledge people have at a moment in 
time and the customers you have at the moment. New people are entering the customer 
base all the time and there is a renewal in skills, scenarios, and usage patterns. Five 
years ago almost no one used a touch screen for very much. Today, touch is a universally 
accepted (and expected) input method. The customer base has adapted and also 
renewed around touch. Universities are the world's experts at understanding this notion of 
renewal. They know that any change to policy at a university is met with student 
resistance (especially in the spring). They also know that next year, 25% of the "customer 
base" will be replaced. And in 3 summers all the students on campus will only know the 
new way. One could call that cynical. One could also call that practical. 
Finally time means that major product change, disruption, is always a multi-step 
process. Whether you make a bet to build a new product that disrupts the market 
dynamics or change an existing product that disrupts your own product, it rarely happens 
in one step. Phones added copy/paste and APIs and even got better at the basics. The 
pivot is the tool of the new endeavor until there is some traction. Feedback, refinement, 
and balancing the need to move to a new space with the need to satisfy the installed base 
are the tools of the established product "pivoting" in response to a changed world. It takes 
time and iteration—just the same way it took time and iteration to get to the first summit. 
Never lose sight of the fact that disrupting is also product development and all the 
challenges that come from that remain--just because you're disrupting does not mean 
what you do will be perfect--but that's a given we all work with all the time. We always 
operate knowing there is more change to come, improvements and fixes, as we all to 
learn by shipping. 
Part of these factors almost always demonstrate, at least in the medium term, that 
disruption is not synonymous with elimination. Those championing disruption often over-
estimate progress towards elimination in the short term. Though history has shown the 
long term to be fairly predictable. Black cars are still popular. They just aren't the only 
cars. 
Product development choices are based on social science. There is never a right answer. 
Context is everything. You cannot NB test your way to big bets or decisions about 
technology disruption. That's what makes all of this so fun!! 
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Go change the rules of the game! 
--Steven Sinofsky 
Note. I believe "disrupt or die" is the name of a highly-regarded management class at 
General Electric's management school. 
Steven Sinofsky I May 8, 2013 at 1:00 pm I Tags: creativity strategy, tension tradeoffs I 
Categories: posts I URL: http://wp.me/p3lnkB-8r 
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