New Markets Blog

Finding the right questions

Occasionally, new markets spring from technological leaps that create huge improvements in tackling well-known challenges.  At least as frequently, though, the companies that push these new solutions intp the market find themselves solving for problems that customers scarcely recognize.  

When I led one of the world's first smartphone development programs, for Britain's Psion PLC in the late 1990s, we had dazzling technology.  You could send a fax from a PDA!  But we seldom paused to nail down the exact question we were trying to answer.  As a smallish, albeit cutting-edge, company in a rapidly-moving market, we had to be precise about what we would and would not try to do.  Yet we were bewitched by our cool solutions, and utterly flummoxed by how people could flock to a bare-bones PDA (Palm) or a primitive two-way pager that could send some e-mails (the Blackberry).  It was a hard lesson to learn.

In my piece for Forbes, I lay out when asking the right question matters, and how to ask it in a broad yet rigorous way.  Companies that thrive in new markets not only have good solutions, but they apply them to precisely the right problem.

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The business model disrupting Apple

Apple -- famed for its engineering and marketing -- is less renowned for its innovative business models.  Historically that wasn't a problem; the company sold high volumes of a small number of products that were ingeniously engineered but not very expensive to build.  It managed to do this at a high margin, enabling its iPhone to grasp over 50% of the profits in the entire mobile handset industry.

Yet this model is highly dependent on two factors: 1) the iPhone, which makes owning the full suite of Apple products much more appealing and 2) big subsidies from mobile carriers that make the iPhone price-competitive with Android and Windows offerings.  A French upstart is starting to break that model, with dramatic results.  Read more in my piece for Forbes. 

Stephen Wunker is Managing Director of New Markets Advisors and author of Capturing New Markets: How Smart Companies Create Opportunities Others Don't.  Read more of our perspectives on telecom.

Four hard choices for wireless networks

In a prior life, I had a happy existence as an executive for a wireless network.  Growth was stunning, profit margins were excellent, and the party showed few signs of ending.  Today the industry faces vastly different prospects.  Cash flows are still strong but there are serious signs of trouble.  In the last year alone, the industry missed out on nearly $14 billion in text messaging revenues due to the rise of "free" texting platforms such as Skype.  To avoid the fate of many other industries that were disrupted by new business models, wireless networks need to make four difficult calls on who they will be in the very different age that is now dawning.  Read about them in my piece for Forbes. 

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Strategy in uncertainty -- six ways to plan in turbulent times

Research in Motion (RIM) has a new CEO today.  Imagine the list of strategic challenges confronting Thorsten Heins.  Not only is his company in near free-fall, but his industry is moving at warp speed.  How can leaders plan strategy in such uncertainty?

Looking across strategic planning efforts, we can identfy six lessons for how to approach the task.  The key is to break from traditional approaches to strategizing and embrace a process suited to uncertain and typically contentious environments.  Read more in my piece for Harvard Business Review.

Stephen Wunker is the Managing Director of New Markets Advisors and author of Capturing New Markets: How Smart Companies Create Opportunities Others Don't (McGraw-Hill, 2011).

Four lessons from Samsung's massive bet

Samsung's plan to invest $41 billion -- this year -- is a bold but well-calculated strategic move. In industries with high fixed costs, beware the free-spending titan; it will happily up-end the
economics of would-be competitors.  A big reason the company can confidently make this
investment is because of its forward integration from electrical components into devices.  It can create markets to consume the output from its big bets on new plants and R&D.  Read more in my piece for Forbes.

Stephen Wunker is Managing Director of New Markets Advisors and author of Capturing New Markets: How Smart Companies Create Opportunities Others Don't.

Yahoo's best suitor has a radically different business model

The swarming private equity firms around Yahoo obscure a more radical pairing and business model for the company.  Yahoo is not a classic private equity play, given the company's iffy prospects and cash flows.  The property would do best with an owner able to create new opportunities to consume content and advertising.  

But who?  Microsoft, an oft-discussed suitor, has plenty of issues attracting people to its search and content offerings, and it may not need to double down its best through trying to save a platform in decline.  Apple would be a much better match.  Read my post at Forbes to see why.

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How RIM might escape the Innovator's Dilemma

Research in Motion (RIM, maker of the BlackBerry) once disrupted the telecom industry through building a new market that the incumbents ignored.  Today it is in the ironic position of being disrupted itself.  The company's seeming solution -- doubling-down on serving highly demanding enterprise customers with its traditional business model -- is looking ill-fated.  There are two alternatives for RIM to pursue.  As with any company in an Innovator's Dilemma, these choices involve some short-term pain.  Yet they also open doors to new sources of fast growth, and they would create ways to compete asymmetrically against firms trying to eat the company's lunch.  Read more in my post at Forbes.

Stephen Wunker is the Managing Director of New Markets Advisors and the author of Capturing New Markets: How Smart Companies Create Opportunities Others Don't.

Apple's Siri -- a business model innovation?

Apple's Siri "intelligent assistant" is a truly remarkable piece of technology, but its most important financial impact may be on Apple's business model.  Could Siri herald a move by Apple to sell services rather than hardware?  That type of strategic shift could lead the company to become far more ubiquitious, and profitable, than seems possible today.  Read more in my post at Forbes.

Stephen Wunker is Managing Director of New Markets Advisors and Author of Capturing New Markets: How Smart Companies Create Opportunities Others Don't

The Amazon Kindle Fire and asymmetric competition

How has Jeff Bezos built a company worth over $100 billion in one of the world's most competitive industries?  While Amazon wins plaudits for its grasp of the user experience, on a strategic level the company keeps triumphing because it attacks competitors asmmetrically.  The $199 Amazon Kindle Fire is a case in point.  The formula underlying the Fire, as well as Amazon's other business model innovations, boils down to four components.  Read about them in my post for Forbes. 

Stephen Wunker is the Managing Director of New Markets Advisors and the Author of Capturing New Markets: How Smart Companies Create Opportunities Other's Don't (McGraw-Hill, 2011)

Symptoms of Motorola Disease

Motorola invented the cellphone, and it led the nascent industry for a decade.  How could this innovation champion fall so far, being acquired by Google essentially for its patent portfolio?  The company's sickness was reflected in three all-too-common behaviors.  Read more in my post at Forbes.