Published on | Prototyping: From UX to Front End — Medium Ákos Csertán

Introducing the Innovation Pressure Mad Libs

Yesterday, Szántó Gábor sent me over an article from Bloomberg about Dyson (the vacuum cleaner company) planning to develop and release an electric car by 2020. As I read it, I had two thoughts:

I totally see it as a viable idea to by an electric car from Dyson. These people have been making electric engines for 30 years now, I’m pretty sure they are good at it. (Yes, I know that General Motors is not actually building electric engines, but it’s fun to imagine Joe, 47, with 20 years of experience designing internal combustion engines trying to figure out how to make the best coil for the Bolt.)
The moral of the story is that with the rise of electric mobility, traditional car companies, with decades of experience of creating automobiles, are losing their competitive advantage on their own market. That the entry threshold of the market has gone lower, and companies are facing unusual, and sometimes uncanny competition — like a vacuum cleaner company in mobility. And the fun part is:

This same story could be about any traditional industry right now.

Most enterprises, when they think about their competition, they imagine a company just like them. Telcos compare their market cap to other telcos, but not WhatsApp. A bank checks the services of other banks, but not Kickstarter. Most companies are just not focusing enough on their most dangerous competitors: new challengers — disruptive startups, or newcomers from totally different industries — that, instead of creating the same business models, start to compete for small revenue streams.

With time, all these little chunks of revenue add up, and whole industries end up being disrupted.

This is what we call Innovation Pressure. The startups that start taking over tiny parts of a market. Or retail chains starting to sell financial services. Gas stations operating as mail outposts. A great new photo sharing app people start to use instead of watching TV. All those tiny, even invisible forces that try to tell a traditional enterprise:

Start innovating around your customers, or you will face a slow but inevitable death.

A great way to understand the Innovation Pressure on a specific market is to do a mental unbundling of key players. Like this one:

Image source: https://www.cbinsights.com/research/disrupting-procter-gamble-cpg-startups/

The Innovation Pressure Mad Libs

Thinking about your company this way is actually a pretty hard exercise. So we came up with a simple tool that can help you think this through. We call it the Innovation Pressure Mad Libs. And it looks like this:

My business line of _________[specific revenue stream]_________ is challenged by _________[unexpected competitor(s)]_________, because _________[competitor’s capability]_________.

Why you should do this?

It gives you a better understanding of your competitive landscape and the alternative products and services your customers might be considering.
It helps you focus your innovation efforts to the right direction — if you see a business line where there are a lot of potential challengers, you might consider doing something about it.
It also helps you find opportunities for innovation. If you find a business line where there are no challengers, it can mean that you found what you are really, uniquely good at.
If you are in a traditional enterprise, and you do this right, it will scare the hell out of you.

Here are a couple of examples to start with:

My business line of creating electric cars is challenged by household appliance companies, because they have experience and credibility in creating electric products.

My business line of selling system razors is challenged by shave clubs, because they can save customers the hassle of buying cartridges at physical stores.

My business line of providing concierge services with my hotel rooms is challenged by Magic, because can provide a wide variety of services for a low price.

Do you have some? Please, do share them in the responses.

Let me know your thoughts. Really. You can also follow me here or on Twitter @csertanakos. I’m not Tinker Bell, but I appreciate 👏 🙂

Is your business model in trouble? was originally published in prototypr on Medium, where people are continuing the conversation by highlighting and responding to this story.

Is your business model in trouble?

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