Product Management: Handling Disruption Part One
Marketing Myopia in the 21st Century.
Three things jumped out at me this weekend. (1) On page 54 of the paperback version of The Facebook Effect by David Kirkpatrick (Kirkpatrick by the way seems to have a bit of a man-crush on Zuckerberg – it is a little weird) this line “[Facebook] was about people; Google about data. (2) The recent announcement from Netflix that they have purchased the rights to stream the popular series Mad Men. And finally (3) this post on Mashable last Friday about what a “Napster never existed” world would look like for record labels. Each of these ultimately reinforces the concept originally defined in Theodore Levitt’s historic paper ‘Marketing Myopia’, detailing the reality and inevitability of business model disruption.
As the fight against LimeWire heats up record labels seem motivated to wax nostalgic about what life 
would be like if Napster never mucked up their works. The labels have ‘calculated’ what their revenue take would be in this alternate universe
Really? Except for Napster the music studios would have had record growth? Except for Napster the historic failure of the traditional-media-oriented music studio behemoths to identify the impact that the disruptive reality of digital music copying and sharing ease would have never happened? Come on! Besides Napster didn’t necessarily create the disruption, they accelerated it. Digital distribution was ultimately inevitable.
Turning to Google Insights take a look at the growth in organic search efforts for the terms iTunes and Pandora. Napster is also included here also, and even though the timeline is well after courts ordered them to cease the file sharing business model you can see that iTunes search popularity is in about the same neighborhood as Napster in 2004. Digital distribution was going to happen, it was going to be less lucrative for the studios, the reaction was slow and defensive in nature.
What about Netflix? In their immediate path seems to be the traditional premium pay cable service offerings like HBO or Showtime. Recent news about original Netflix content certainly raises the disruptive reality for those companies. The current state of search popularity for the three certainly indicates that premium cable content providers will have no choice to but to figure out how to respond to this disruption.
Facebook’s current and maturing disruption of Google is in a completely different category, and Kirkpatrick’s note about the data centric nature of Google versus the people oriented focus of Facebook speaks volumes to the fact that the disruption is potentially massive. And while search trends might not be as relevant these numbers from Google Insights are dramatic non-the-less. Google seems to continue to struggle with injecting a personal element into their service. Efforts such as Wave, Buzz, and even Places to a degree seem to simply not have had the weight to penetrate the social web ownership enjoyed by Facebook.
Disruption is aptly named. Product managers and product marketers must make it a priority to identify disruption or the potential for disruption as early as possible. Failing to do so could lead to permanent disruption. Google believes it a serious enough reality that co-founder and new CEO Larry Page is fiscally incenting the entire Google workforce to make penetrating the social web market a priority.
A post on how to ID and manage disruption is forthcoming, in the mean time what is it that your organization does to identify and address business model disruption?
Photo credit – happy via
