There is a concept that intrigues and has for years. It is a component of innovation and it is in effect the existence of the market. It is the creation, or capturing of a market during the process of market evolution. There is by the way also a process of market devolution where a market literally fades away.
In my book on innovation I talked about a number of factors that impact innovation but also the three rates at which innovation occurs. The rates of innovation revolve often around the market the innovation is in. There are slow growth markets. Incremental in effect where you add things to your solution because someone else already did. The new thing gets absorbed by everyone in the market quickly. The cellular phone market is an incremental innovation market. The next big thing, becomes last years big thing that everyone has.
But market evolution can occur without innovation. Market maturity can be separate from innovation and can be more risky. If we take the cellular phone market we can see an interesting market evolution. The market originally was dominated by the old style hardware is cheap software is expensive. I suspect if you look at the evolution of the market it forced the change in 2007. The reversed market suddenly made the hardware more costly and the software became cheap. It forced the original market companies to rethink and scramble and frankly in the end the market evolved past them.
You can pick a number of old line companies that in the end have struggled to stay relevant. It happens as a market they are in evolves. We could argue that it also occurs because the company evolves as well – moving further down the innovation chain. In the end today’s market becomes tomorrows forgotten tools.
Many books deal with this topic of evolution in a number of different ways. The Blue Ocean theory deals with the concept of evolving out of the competitive Red Ocean. In how the might fail the book examines the triggers within the market that cause companies to lose ground and eventually lose their way.
Change is a barometer and at times a model. If you continue to change as an organization you run the risk of changing past where the market is evolving. towards. If you don’t change you risk the market evolving around you and in the end past you.
Market evolution is the last thing some companies realize.
Right as they are no longer relevant.
In the end who is next?