Blockbuster was once at the top of its industry. You wanted a lazy Sunday, so you drove to Blockbuster to rent a movie. How, then, did Netflix steal Blockbuster’s monopoly in just a few short years? Blockbuster had a massive distribution network and after its purchase by Dish Network gained the opportunity to reinvent its brick-and-mortar model, but the video chain instead doubled down. It failed to see streaming as the future of on-demand video, and it didn’t have the foresight to cut out the content middleman.
That gave Netflix a foot in the door. Although Netflix’s bread and butter was once DVDs by mail, it realized before the big studios that its model couldn’t last. The streaming video giant leaned forward, jumping into content creation before film studios could roll out their own networks. Studio-specific distribution platforms would have chopped Netflix out of the equation, bringing hundreds of millions in revenue for what would have been only a few-million-dollar investment.
Beyond Blockbuster, perhaps the second-hardest fall in corporate history belongs to Xerox. The print services company built the Palo Alto Research Center to pioneer emerging technology, yet allowed countless innovations — from the graphical user interface to Ethernet networking to the mouse — to walk out the door. Once the copier market hit saturation, the company was left without a plan — or a product — to carry it into the future. In the dog-eat-dog business world, Xerox and Blockbuster are powerful reminders: Companies must not only focus on current success, but also plan for a future foothold.
The Product Development Trifecta
To thrive, every business needs short-term and long-term goals. To help companies reach them, we think about product development across three horizons, or phases, that encompass the present, the near future, and the distant future.
1. The Here-and-Now Phase.
The immediate phase is all about iterating on the product or service you’re already delivering to customers. You’re working to improve the user experience, add functionality, and reduce pain points. The work in this phase is what keeps the business’ books in the black, so it’s likely where you’ve focused most of your engineering talent. During the first phase, process consulting builds more effective processes while preventing fires and other emergency situations that divert resources from other phases. The here and now is usually chaos — something isn’t working right, but you have to launch to bring in money. To help companies surmount phase one, we engage teams to develop better processes through design sprinting and to educate them on processes that proactively extinguish fires. While this phase is essential, the current technology is typically one or two generations behind. If all engineering talent is focused on this phase, you risk becoming the next Blockbuster.
2. The Up-and-Coming Phase.
You may be the market leader now, but who knows what will happen in three to five years? This phase is all about staying ahead of the competition’s upcoming offerings. If you’re a forward-thinking company, then you’re probably dedicating 10 to 20 percent of senior talent to this phase. Your biggest challenge is staying on-trend: Technology developed years in advance isn’t quite so cutting-edge when it’s actually released. We sit down with a company to discuss its three-to five-year vision and the company’s assumptions as an unbiased resource. Then we rapidly test assumptions with customers to develop a prototype that will create the most value with customers. Within two to three weeks, our talented engineers find the answer for your company. This is because we’re always up-to-date on the latest technologies most companies simply don’t have the bandwidth for. We work with PlayStation, Qualcomm, and others on phase two, helping them stay on the cutting edge of technologies they otherwise wouldn’t have access to.
3. The Shoot-for-the-Moon Phase.
No matter how successful your current product lineup, there will come a time when your business must pivot to create products for new platforms. Look at Apple: It pivoted from creating computers to MP3 players to smartphones to tablets and now back to computers. Unfortunately, phase three is the most forgotten, which is why you see so much fluidity among the Fortune 500. When legacy companies get complacent, new players take over. Google moonshots with its Google Labs division, which creates concepts that seem impossible for most companies. The idea is that if you put a bunch of smart engineers on solving a problem, the end result doesn’t matter as much as the hundreds to thousands of smaller inventions made along the way. Phase three is when the benefits of hiring a firm like Yeti really shine, as we’re always up-to-date on the latest technologies like the Oculus Rift, 3D printers, augmented reality, and more. We live, eat, breathe, and sleep innovations that allow us to rapidly prototype phase three technologies quicker than you can on your own.
Product Development Firms Can Help
No one in product development has ever been promoted for killing a project after there’s company buy-in. This incentivizes internal teams to oversee as many product launches as possible with the bias of being rewarded for bringing any idea to market, whether it’s good or bad. External consulting firms don’t get rewarded for delivering failed products to market. We work through the testing phase so quickly because we’d rather know sooner than later whether something works. If an idea won’t work, the budget can be rolled into something with more potential, saving time, money, and internal resources. By providing access to the latest technologies and enabling levels of exploration beyond the scope of your current business, Yeti can position your company to be the next Apple or Google instead of the next Xerox or Blockbuster. Is your company ready to boldly go where no others have gone before?
Tim Shipman is a Yeti Alum. Tim is an avid cyclist who enjoys exploring new, creative ways to apply technology to suit clients’ needs. When he's not in the Yeti cave, Tim can be found in front of a TV giving an in-depth analysis of the San Francisco 49ers to his Great Dane, Big.