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Understanding the Focus and Challenges of Technology Lifecycles: Part 2

By Peter Gaarn, Senior Consultant, The Piras Group

Second segment in a series about leadership and the technology lifecycle. All segments can be seen on video or read. The first segment can be found at Understanding the Focus and Challenges of Technology Lifecycles: Introduction.

Key Business Challenges Through the Product Life Cycle

As discussed in our previous post, our research led us to a series of key business challenges at each phase of the product lifecycle. These challenges are still very applicable to technology products today and we will discuss the core challenges at each stage of the product lifecycle.

Early Market Phase

In the early market phase, the business must decide on the appropriate market opportunity to go after. In this phase, they are often strongly influenced by technologists, early adopters, angel investors and venture capitalists who are interested in the technology and want to see specific features or functionality. 

Early Market Phase

It’s critical at this point to objectively define the opportunity and not be persuaded by the one-off wants of early adopters. Businesses in the early market phase must focus on the market segments they want to capture in the bowling alley phase so that they can have a successful launch and commercialization of the product. It is vital to focus on what the market really wants, not just the needs of early adopters.

Another important note about the early market phase: generating revenue is not a concern. The major concern is getting the technology or product right. This is the key challenge for businesses at this phase.

Crossing the Chasm

As the product evolves, crossing the chasm is critical and the challenge is in technology leadership and market segmentation. The business challenge is to provide a differentiated product that can grow the business and begin generating revenue and profits. It is also essential to understand what customers are really motivated by, what their needs are around the technology and the product, and to solve their business problem or meet their needs in some way.

Crossing the Chasm

If the product or technology is disruptive, then time to market is especially critical to capture the dominant design that will lead the market into the future.

Tornado Phase

As market segments continue to grow and the product begins to take off, then the organization must prepare for the tornado phase. The business challenge shifts from differentiation to scale and how to bring order to the internal processes and organizational issues that will enable explosive growth. 

Once the market herd begins to move and the demands increase, there is a major shift in all aspects of the organization.  This is an incredibly demanding time for the company that requires the metaphorical seat belts to be fully fastened for the rocket ride they are about to experience.

The Tornado Phase

In addition to the internal challenges this phase, there are also external challenges as competitors begin attacking and going after market share, and partners and processes become essential throughout the sales channels and supply chain in order to meet growing demand.

Commodity Phase

While the tornado phase can last for years depending on the product or technology, it is inevitable that the business will wind up on main street as a commodity. Once a product enters the commodity phase, it starts to clarify what business it’s really in at this point in time.

Take for example HP Inkjet printers. As the home printer market matured, it became clear that they were truly in the ink business where there are high margins and an ongoing need to feed the printers already in the market, leading to higher and ongoing revenue.

The Commodity Phase

The other key shift that that occurs between the tornado phase and main street is around focus.  In the tornado phase, customer intimacy and satisfaction are not important; market leadership, market share and time to market are paramount. As they move into main street, this changes and customer satisfaction becomes essential, as well as a shift to profits/margins, expense management, and employee retention.  

At this point, there is also greater emphasis on end of life support for customers, as well as the hunt for the next innovation to fuel the s-curve and begin the cycle again.

Throughout these phases, the challenges shift from product to company, however, it is difficult to separate the business challenges within each phase from the leadership role and changes taking place across the lifecycle. So, in our next post, we'll turn our attention to roles and challenges of leadership in the technology lifecycle.

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