When David beats Goliath: Crossing the Chasm

This weekend was memorable for a number of events. While at a personal level, it was memorable for my son getting his Karate Black Belt, for many it was memorable probably due to another famous Indian victory over Pakistan at the World Cup, and for some it was memorable due to Valentine Day.

But the one event that will probably have a much larger long term impact is the installation of the AAP government in Delhi. For a party less than 2 years old based on an anti-corruption movement of 3 years or so, and which, after showing early promise had almost messed it up last year, to come back to power with such a stunning majority, albeit in one city state, is nothing short of miraculous. Even David beating Goliath seems like an understatement.

My articles on AAP started with my initial thinking that AAP had reached a tipping point after its surprise 28 seats in Delhi, then moved to realizing that I was probably an early adopter of an uncommon man’s agenda, and finally, after a chain of events, theorizing that perhaps, AAP was a disruptive innovation that was getting stuck in the proverbial ‘chasm’ quite similar to how so many innovative products end up in technology marketing.

But the kind of sweeping victory that the AAP saw in Delhi is, perhaps, not possible unless it has moved out from being an ‘early adopters’ phenomenon stuck in the chasm (which it was thought to be) to at the very least ‘an early majority’ phenomenon (which it seems like now).

At the early adopter phase, an offering holds promise due to its disruptive idea, but it is backed largely by a smaller group which backs it based on mainly emotional or idealistic principles. Whereas in the ‘early majority’ phase, the offerings’ buyers consists of a pragmatic adopter base which is more solid because that group makes a rational choice after seeing the cost benefits and decides to give it a chance.

In a technology product marketing life cycle, generally after the early adopters have taken an innovative product up, there is huge ‘principles-based aspirational marketing’ based on superiority of the offering and bad mouthing the competition, which the AAP did early next year.

imagesUnfortunately, while this attracts the early adopters, it doesn’t work to convince the early or late majority who are looking for concrete reasons to make any changes to the status quo. Lack of such reasons is also why lots of products end up in a chasm which not many can easily come out of. Till the early majority sees some benefits compared to status quo, and decide rationally to give it a chance, they stay there, often forever.

The AAP with its disruptive idea of honest politics has definitely and quickly moved from the early adopter to the early majority stage.

And if this is true then it is bad news for people in power – who themselves capitalized on the promise of a credible alternative.

But the good news for the same people is – bear in mind – it is still a chance though a very rational one – meaning the disruptive innovation has moved a few steps forward in being mainstream but is still not mainstream.

The next stage in AAP’s emergence is typically adoption by the late majority which can make it completely mainstream.

If one goes back to the technology adoption life cycle, this typically happens when the early majority sees proven benefits for specific use cases after using the product for a while, the perceived risk and costs of adopting it go down, and the early adopters become the biggest influencer for starting adoption by the late majority.

And that is what is likely to happen with the AAP as well. At this stage is also when most of the competition starts to take notice of what was initially dismissed as something that doesn’t work.

Hence, from here on, it is simply a race between the incumbent and the disruptor – because neither has the luxury of the laurels of the past or the promises of the future.

We have seen this play out every time a new innovation comes in the market.

Success that leads to mainstream adoption depends largely on the ability of the disruptor to fulfil its original promise without the risks of disruption, as well as the approach of the incumbent to reinvent itself to compete on the new innovator’s standards without the arrogance of resorting to past laurels.

A famous example of an incumbent leader losing out over a prolonged period of time is how Kodak (a leader in films and film cameras) lost out to Canon when the digital camera slowly replaced film-based cameras with Kodak continuously resisting the shift, even after it was evident that the new technology had moved beyond early adopters.

Another recent and more drastic example of disruption is how Nokia and Blackberry who were undisputed mobile leaders lost out completely to Apple and Samsung in the mobile market in a space of just about 3 years due to the smartphone innovation which they didn’t see coming. We see Nokia coming back in its new Windows avatar largely due to a re-invention.

A famous example where a disruptive innovation did not quite replace the incumbent is how IBM embraced the PC even when it was a highly successful mainframe leader, had grown based on it and at that time could have easily resisted the PC and dismissed it as a fad (which it initially did).

Another similar example is how electric cars somehow never managed to replace fuel-based vehicles despite clear innovation as they got stuck in the chasm after early adoption due to the risks of adoption by the majority.

A number of times the best thing for an incumbent to do is to embrace the disruptive innovation rather than to resist and fight it. It needs a proactive action to address a market that it has never addressed directly. Resistance often leads to further erosion till it reaches a point of no return.

In the fight for political space with the AAP, the worst thing for the BJP and other parties to do would be to resist it, have an obstructionist, elitist approach or to constantly communicate that they don’t believe in AAP’s ability or intention to deliver on its promises.

Due to the massive mandate AAP got in Delhi based on its disruptive idea, that kind of resistance is likely to work against BJP and turn the perception against them in the battle for the early majority in political space. While it is to be seen whether the AAP disruption spreads beyond Delhi, resisting it further will definitely not provide any benefits to the BJP – as the battle for early adopters and the early majority (in Delhi) has already been lost.

In order to stop the spread to the rest of the majority, embracing the idea of honest politics, reaching out to the new markets being captured by AAP and continuing to deliver on its own promises is what will help the BJP. So while it works on delivering its national agenda for development, it is important to be seen to be proactively constructive for Delhi, especially for the segment that has clearly moved to AAP.

It is a race. For the incumbent BJP, it is a race to hold on to its turf by delivering its original national promises and embrace the new disruptive idea constructively, and for the challenger AAP, it is a race to deliver on its Delhi agenda so that it does not remain an experiment and edges forward as a mainstream player with its national ambitions.

At the end of the day, it does look like the voter is the smartest of all. It has left both with little option but to deliver.

Disruptive Innovation and India’s Tryst with Destiny

Very many years ago I had read a book considered by many as a classic in technology marketing – “Crossing the Chasm – by Geoffrey Moore”.

It describes the challenges faced by technology marketers, most of whom, at some point, have to sell a product or service that has definite value that will change its market, but is at a price early on which doesn’t make sense given the state of the market. Moore presented a theory of the technology adoption life cycle and how people with different mindsets buy technology products at different stages of their life cycle for different reasons.

Below is an extract from the 1998 edition of this classic:

“As the revised edition of this book is being written, it is 1998, and for this time we have seen a commercial release of the electric car. General Motors makes one, and Ford and Chrysler are sure to follow. Let’s assume the cars work like any other, except they are quieter and better for the environment. Now the question is: When are you going to buy one?

Your answer to the preceding question will tell a lot about how you relate to the Technology Adoption Life Cycle., a model for understanding the acceptance of new products. If your answer is, “Not until hell freezes over,” you are probably a very late adopter of technology, what we call in the model a laggard. If your answer is, “When I have seen electric cars prove themselves and when there are enough service stations on the road,” you might be a middle-of-the-road adopter, or in the model, the early majority. If you say, “Not until most people have made the switch and it becomes really inconvenient to drive a gasoline car,” you are probably more of a follower, a member of the late majority. If, on the other hand, you want to be the first one on your block with an electric car, you are apt to be an early adopter.”

Most successful technology products sell to the early adopters and makes it easy for the early majority to buy them early. Later they make it imperative for the late majority and the laggards to gconsumer_mapping003-001et on board too. Between the early adopters and the early majority is the scary chasm to cross. Technology products and services, many of which are ‘disruptive innovations’ become truly successful when they cross that chasm.

As India goes to the elections next month, the voter is faced with choices spread across the spectrum of old age decadence to new age disruption.

On the one hand is an aging product losing market share and voter credibility with little signs of revival by a confused young leadership (represented by the Congress led by Rahul).

Then there is a product of some credibility in a me-too company, promising past established benefits to a larger geography (represented by Modi in an old-world, factional BJP).

And the new choice is what could potentially be called a disruptive innovation that promises the value of market-changing idealism but no one is sure at what price (represented by Kejriwal and his haphazard medley of AAP).

The disruption of the kind represented by AAP, while often promising value, is not accepted well by the Indian establishment, and perhaps, also not by the Indian voter – specially because of the perceived fear of the price one pays for disruption.

This is true of the Indian technology buyer too – something that most technology marketers in India know. Most products face a wide chasm before they become truly accepted.

On similar lines, this reality of the Indian voter is what most politicians in India know. And it is due to this reality, that it is easy for established companies (and established political parties) to cloud the perception of a new disruptive innovator with more of disruption and less of innovation. The disruptive innovator’s DNA makes it easy to do so too.

The parallels in the AAP and technology marketing don’t end there.

Most disruptive innovations need early adopters to tolerate some early failures (even disasters) for the pride of being an early adopter. In the early life cycle, innovative products fail unexpectedly, or can’t provide service, or are inconvenient or downright embarrassing to own sometimes. Early adopters generally don’t perceive those risks because they see the benefits of market changing value that the disruptive innovator promises.

But the early majority doesn’t – and hence the chasm.

The AAP and the criticism it received for the 49 days of governance in Delhi is an example of how disruptive innovations can dismay even the staunchest of early adopters.

Despite that, many early adopter voters are prepared to support it for the innovation of honest politics that it promises. But many early majority voters are also willing to settle for Modi’s promise of development and governance, without any major impact of corruption, due to the fear of the price of disruption.

Most disruptive innovations also need the early majority and the late majority to adopt it to become truly successful.

It looks like the AAP, at the current time, like many disruptive innovations, is stuck in the chasm currently between early adopters and the early majority.

But there are no hard figures to prove or disprove the same. May be it has crossed the chasm if you believe their staunchest supporters, may be it is stuck there for ever, if you listen to their biggest detractors.

Like most disruptive innovations, unless the results are out, one can never be sure.  While the Modi-led NDA’s ascent and the Grand Old Party’s decadence seem to be the ‘givens’, where in the life cycle the AAP lies is perhaps the biggest ‘unknown’ in these elections – an unknown that can surprise either way, like most disruptive innovations.

The next few weeks will determine what is contemporary India’s Tryst with Destiny.

We will wait and see.

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