A company manages new products in three categories;
- Breakthrough (high risk, high reward)
- Platform (commonality - products with the same customer experience, processor type, clear market segments , etc.)
- Derivative (changes to existing products - lowest risk)
Most companies think that derivatives.(same products updated and improved) will bring us more revenues . They are safe, they have precedents and the business case is easy to justify, even if it gives modest gains
Financial numerical decision makers do not work in breakthroughs, Companies should change the culture and invest more in breakthroughs than in the past. Their reliance on say, 70% Derivative, 25% Platforms and 5% Breakthroughs, will not lead to real competitiveness, real differentiators, real collosal revenues
You may ask how the hell to get approval without financial goals approved in large companies.
There is only one way: via spin-off. Simply true breakthrough ideas can not develop in companies with different missions. Spin-offs will become, one day, a common management tool
What is scary on Silicon Valley is that many large VC - exactly like large companies - are also the slaved of ROI. Most new ventures request a product development completed, at least at prototype level and at least three customers. The name of "Venture" in the VC name becomes sometimes superfluous. They are simply cautious capital investors with modest aspirations for sure gains.
In absence of corporate spin-off policies and true early stage VC's, new breakthrough ideas stale. The 2006 entreptreneurs, - engineers and product managers - desist.
I wish this image of a weakened Silicon Valley will recover and prove me wrong.
We need more Chief Product Managers as CEOs. The more we have, the more lottery tickets we have. The more lottery tickets we have, the higher the jackpots. Great breakthrough companies can not be born without taking real risks.