Creative Disruption and Destructive Disruption of Product Life Cycles

One first must spend a few minutes getting a big picture overview of product life
cycles to then understand what drives the changes, the business growth or decline
found in each stage, and most importantly know where you are in your market

For technology companies Geoffrey Moore's concept of a technology adoption and life cycle is a some great thinking.  The "Chasm" got all the attention because is where so many companies fail.   These business models often take huge venture capital money that they never get and they just go away.

With product based business you normally have no choice but to start small.  It is probably even more difficult to get capital as a product based business but it is often not needed in the "start small and grow my business" world.

With the reference of product life cycles in mind I have taken my entrepreneurial experience and updated it to reflect the key aspects of what I see as see happening at each stage of a product life cycle.  The Wiki has a great entry on this topic at http://en.wikipedia.org/wiki/Product_life_cycle_management but they leave out innovation.

The key "take away" here is that innovation follows the curve as well, if not better, than any other measure.

I entered the wakeboard tower market as an enthusiast and early adopter and sold the company, what I now know, was at the end of the main stream market.   I entered the awning market 10 years ago into 100 year old laggard market but our innovation and pricing has been in line with this stage.   We entered the T-Top market late stage and have seen every aspect follow the product life cycle as I have seen it.  We have been the only innovator for almost 2 years and rapidly see a laggards market with Chinese companies now directly entering our markets.  This has already accelerated the wakeboard tower market from main stream to laggards in only a few years.

Creative Disruption

When I entered the awning market we had nothing here, we are playing by the laggards rules. 
For Monster Tower in the wakeboard tower market we were the perfect example of creative disruption of a market.  Everything was custom that was worth owning.  Anything universal was junk and ANYTHING universal had a stigma of not worth owning.  Everything custom was 2-4 months away from delivery and that demand was growing even with insane prices.  We solved a lot of problems for a lot of wakeboarders and boat dealers through a great team of wakeboarders and enthusiasts and engineers and we innovated like mad as were so many others.   We innovated amazing new products.  Everybody was bringing crazy cool new products to market and companies like Boss, Mako, Skylon, Titan, Fluid Concepts, Bare West, Fusion, etc and us were all creating and innovation with a passion for competition.  SurfExpo, our annual trade show, had 10 or more companies showing off the latest new product of theirs every year with impressive booths.  Fishmaster brought new innovation to the fishing products market with companies like Atlantic, Birdsall and Taco, and others but we are in a very late stage market.

and Destructive Disruption

Still got nothing in the awning market, late laggard stage market.  Wakeboard towers have become a commodity with China based LT Wakeboard setting up shop in CA as Aerial Wakeboarding following DIYwake.com and others.  Two or three other legacy Asian companies are doing a really good job have set up shop here to a lesser degree.  All have quickly moved the tower market from main stream to laggard and innovation has  come to a standstill.   Patents and trademarks are being blatantly trampled over.  Business ethics become secondary in this aggressive phase.

The pricing wars in the market get markedly more noticeable in the "off season" as vendors trade inventory for cash flow.   Most of the innovators are now out of business and there is little innovation in the market.  There was not one tower company at "our" annual trade show this year.

For Fishmaster new competitors from the far east are posing both challenges and opportunities.  We now quickly enter the laggard phase and logistics, factories and pricing become key.  Business ethics become secondary to market position.

As long as you understand where you are in the product life cycle there will always be a way to take advantage of the opportunities that are presented.  It does get uglier as you move to the the last stages but if you know how to play the game well you can certainly have a lot of fun along the way.

BB