Marketing Mondays: Your Innovation Roadmap, Part 4 – Macro & Micro Context

Growth Matrix

In Your Innovation Roadmap, Part 1, I introduced the innovation matrix (featured above) and covered Quadrant 1: gaining market share. In Part 2, I covered Quadrant 2: bringing your current offerings to new customers. In Part 3, I covered Quadrant 3: bringing new offerings to existing customers.

I’m going to split our Quadrant 4 (bringing new offerings to new markets) discussion into two parts. In this first post, I’ll cover Macro & Micro Context, which discusses when to look to Quadrant 4 innovation (instead of Quadrants 1-3), and why it’s so hard for established companies to pursue this route. In the next post, I’ll cover a process and case studies for pursuing Quadrant 4 strategy.

At some point, a company’s growth stagnates. The industry that the company plays in grows stale, and/or the company’s offerings reach a market share that simply is not likely to grow further. And, so the company must look to new areas for innovation and growth. Why is this? There can be a variety of reasons related to the niche market dynamics of an industry, which I won’t go into in this post given the range of industries that I’ve been covering in this series. But, usually, if you dig deep enough, you’ll find that the reason for stagnation stems from a macro and a micro trend:

  1. Macro. The stage in which we find ourselves in our current technological revolution, and
  2. Micro. The Law of Diffusion of Innovation related to the company’s current offering(s)

Macro: Technological Revolutions
In The Purpose Economy: Part 3 – Technological Revolutions, I describe the lifecycle of a technological revolution, and how we are currently at the tail end of our current revolution. This is based on research from economist, Carlota Perez captured in her book, Technological Revolutions and Financial Capital.

Lifecycle of a Technological Revolution_today

As you can see from the image above, each revolution has a big bang moment where a discontinuous innovation comes to market, inspiring new products and industries, and driving fast innovation and growth. This period can be messy and chaotic, as society looks for economic models for this new technology. Later, come the systems and infrastructure that support the eventual full expansion of the new technology’s potential – an array of innovation with validated economic models. Finally, the last new products come to market, and the new technology that was introduced in the big bang moment reaches a mature market saturation point before the next big bang moment and new, discontinuous technology is introduced.

6th Technological Revolution Around the Corner

Today, we find ourselves at the end of our current revolution: the Age of Information and Telecommunications, whose big bang moment was the Intel microprocessor that was introduced in 1971. Over the course of approximately half a century, each revolution follows the same sequence: big bang moment –> financial bubble –> collapse –> golden age –> political unrest –> next big bang moment. Clearly, we had our big bubble and collapse with the Great Recession that hit in 2008. We’re now well into a golden age where microprocessors have achieved a global market saturation point, enabling the use of mobile devices worldwide, along with an array of software applications that our modern society now relies on, and, dare I say, takes for granted. And, given the current state of affairs across the globe, with frequent shootings and mass killings, divisiveness and political debate of the lowest common denominator, who can argue with the idea that we are experiencing political unrest? Finally, we are 45 years into our current revolution. The next big bang moment is right around the corner.

Understanding the technological revolution you’re operating in, at what stage of that revolution’s lifecycle your company finds itself, and what role your company’s offerings play in this landscape can give you some indication of the potential innovation opportunities available and growth runway left for your company’s offerings.

Micro: The Law of Diffusion of Innovation
Popularized in Geoffrey Moore‘s book Crossing the Chasm, the Law of Diffusion of Innovation, described as the Technology Adoption Life Cycle, follows that

  • 2.5% of our population are “innovators”,
  • 13.5% are “early adopters”,
  • 34% are the “early majority”,
  • 34% are the “late majority”, and
  • 16% are the “laggards”


Critical to launching a new offering in a new market, is identifying who are the innovators that actively pursue new offerings in that product segment. For a tech product, you might find these people on Product Hunt, Techmeme or lurking in subreddits. For a CPG company, these early adopters might be brand advocates for existing, related products that are already in market, or folks that are constantly testing out new products. They might be found writing volumes of reviews on Amazon or actively blogging, and can be as broad as the mommy blogger, or as niche as a foodie or beauty blogger.

Next to adopt a new product are the early adopters. Like the innovators, this consumer segment buys into new product concepts early, as they find it easy to conceive the potential of the product without that product being fully validated or perfect.

As Geoffrey Moore argued, the real difficulty for a technology (or any new product) to reach mass market appeal and achieve enough momentum to maximize its revenue and profitability potential is crossing the chasm from early adopters to early majority. Unlike the innovators and early adopters that preceded them, whose decisions are driven more by emotional and social factors, the early majority segment of consumer makes their decisions based on more rational factors and prefers to purchase products once they have been more fully validated by other consumers. But, once a company gains momentum with the early majority, it can expect a healthy business for some time to come. The early majority represents 1/3 of the adoption lifecycle, followed by the late majority, which also represents 1/3 of the adoption lifecycle. This late majority segment does not feel comfortable adopting a new product until it has become a standard. Finally, the laggards segment does not want anything to do with new products. They are very set in their ways, and do not adopt a product until they are forced to (which usually means that the product they like to use is no longer available).

Why Quadrant 4 is hard for established companies
Typically, established organizations struggle with Quadrant 4 because of the very fact that they gained traction with that early majority. As we learned from Steve Blank, a company is a permanent organization designed to execute a repeatable and scalable business model. On the other hand, a startup is a temporary organization designed to search for a repeatable and scalable business model. In other words, the business of a startup is to bring a new offering to a new market, test whether or not the market (i.e. the target customer) will adopt that new product, and validate a business model that will (eventually) generate profits. Whereas the business of a company is to scale that business model.

Once the company gains momentum with the early majority, focus shifts away from innovation and towards offering the company’s product more effectively and efficiently. In other words, infrastructure such as people, processes and technologies are brought into the company to enable the organization to meet consumer demand and offer more of its products at a reduced cost, increasing margin (profits). The initial focus is Quadrant 1: gaining market share. Later it shifts to Quadrants 2 and 3: offering current products to new markets, and offering new products to existing customers, respectively. Quadrants 2 and 3 only require incremental innovation and can leverage the company’s existing infrastructure. Quadrant 4, on the other hand, requires discontinuous innovation, and may need an entirely different infrastructure to succeed.

Understanding where your company’s offerings are on the adoption curve is critical to deciding on which quadrant to focus your innovation efforts.

Pursuing Quadrant 4 innovation
In the next post, I’ll cover a process for pursuing Quadrant 4 innovation and provide some examples of companies that have successfully done so.

To read about Quadrant 1 – grow market share – click here.

To read about Quadrant 2 – new markets – click here.

To read about Quadrant 3 – new offerings – click here.

Business’ Dirty Little Word 

Everyone wants to do it. Everyone wants to be it. And, so everyone uses it. Ad nauseum. They place it in front of other words to make what they do or sell, or how they think, sound smarter. They get confused or defensive when someone else uses it in a different context or in a different discipline. There are any number of levels to play it. From the executive suites to the people on the front lines.

The word is “strategy” or “strategic”.

So, let’s assume that everyone is.

How do you think, what do you do or what do you make that sets you apart?

Cold Calling on LinkedIn? Offer Up A Strong Handshake


How would you feel if you walked into a meeting, and the person introducing himself for the first time offered you a floppy handshake? Maybe he doesn’t even look you in the eyes…That’s how I feel when someone that I don’t know sends me the default LinkedIn invite. I feel even more irritated when someone I don’t know sends me a default invite on a more personal social network like Facebook or Foursquare – networks where I share pictures of my family and my physical location.Yes, social networks have increased the size and efficiency of our personal and professional networks. But, don’t be mistaken: they haven’t changed the best practices of networking. In the end, you’re still building and managing relationships with real people. Effort and attention still mean a lot; there’s no room for laziness in social media. So, here is a quick guide to introducing yourself on LinkedIn.

Get InMail

First of all, instead of asking someone to join your network without them knowing anything about you or having had any experience with which to judge you (and, they are judging), send them an InMail. InMail is LinkedIn’s in-network email. It allows you to send messages to people you are not connected with. This will give you more characters to write a more complete introduction.

Grab Their Attention

Subject line matters. Identify the 1-3 main points you want to make and write them in the subject line (limit to about 50 characters). If you’re selling a product/service, I suggest including the name of your company as one of the points in the subject line.

Make It Short and Sweet

People are busy. They have a short attention spans. So, get to the point and make it easy for them to understand what you want and whether or not they’re interested. I like to limit my introductory emails/InMails to 3 paragraphs and under 10 sentences.

  • 1st Paragraph – Introduce yourself. Who are you? From what company? (don’t assume people will look at your profile to figure it out)
  • 2nd Paragraph – Why are you contacting them? Would you like to discuss a potential partnership? Have a product/service that they might find useful? Interested in their career and would like a 10 min call for advice?
  • 3rd Paragraph – End with a “yes”/”no” question (i.e. a call to action).

I love emails where all I have to answer is “yes” or “no”. Unfortunately, I rarely get them, but I do try my best to write them.

If You’re Using a A Basic LinkedIn Account and Don’t Want to Pay for InMail

Then, you have 300 characters (or about 3 sentences) to make your introduction. I suggest following an abbreviated version of the outline above.

  • 1st sentence – Introduce yourself
  • 2nd sentence – Why are you contacting them?
  • 3rd Sentence – Ask to add them to your network on LinkedIn

If they accept, then you can follow up directly with an email or call.

Have you received or made cold calls on LinkedIn? Would love to hear your thoughts.

Practice Social RECIPROCITY, not Social MEDIA

As Gary Vaynerchuk so astutely pointed out in this video, “social media” is a misnomer. The word “media” makes brands think that they can still push out their messages and advertisements like they have for decades through traditional media, but now they’ll earn some kind of positive, “viral” reaction just for doing so through social media. Not the case – not by a long shot.

Here’s what traditional advertisers and brands don’t seem to understand: social media isn’t about pushing out messages or distributing amazing branded content or even about innovation in technology. It’s about human behavior. It’s about creating efficiencies in, and scaling, basic human behavior. Or, as Ted Rubin so aptly says, “Please, please remember… Social media is NOT about tools or technology, but about PEOPLE.”

To paraphrase “The Thank You Economy”, it’s a big world out there, but social media makes it a small town. And, you better mind your manners.

I named my blog “Reciprocity Theory” because it keeps me focused on the human intuition that powers social media: RECIPROCITY.

People inherently want to do business with people (and companies) that they enjoy doing business with. If you’re going to spend the vast majority of your time at work, don’t you want to spend that time with people you connect with? Same goes for consumers. They want to buy products and services from companies that they connect with – companies that value their customers and show it. Social media empowers brands to connect with their customers in a scalable, yet personal way.

Zappos is the pinnacle of reciprocity. They have built a billion dollar company by developing a culture focused on delivering happiness. They deliver happiness to their customers, sure. But, they deliver happiness to their employees and partners first. Every year, every employee and vendor gives their honest assessment of the company, and all those perspectives – good and bad – get published publicly in their culture book. The company truly listens to, and cares about, its people and partners, and that culture of caring – of delivering happiness – trickles down to Zappos’ customers. It’s a reciprocal effect of epic proportions. (Side note: if every business and marketing professional read Tony Hsieh‘s book, “Delivering Happiness: A Path to Profits, Passion and Purpose”, the world would be a better place…honestly).

I always say that small to mid-size companies are better structured than large companies to take full advantage of social media’s power. That’s because social is a real-time medium, and practicing social reciprocity means trusting and empowering your team to make decisions in the customers’ best interests, in real-time. That starts in the c-suite. It starts with the company’s visionary. Only s/he can decide to reinvent the company’s culture and make customer caring and innovation a priority, and hold his/her team accountable for developing that culture. That’s easier to do for the owner of a local coffee shop or president of a privately owned, boutique hotel group than it is for the CEO of a publicly owned, Fortune 500 company. But, that shouldn’t stop the latter from trying! Because the effects of social reciprocity are well worth the efforts.

I discussed the ROI and opportunities presented by participating in social media here. Ultimately it comes down to what Ted Rubin likes to call ROR (“Return on Relationship”). “Relationships ARE the new currency”, says Rubin – “honor them, invest in them, & reap the benefits!”

Social media isn’t so much an investment in money, as it is in time and relationships. Care about your customers. Develop a corporate culture that cares about its customers. Then, use social media to practice social reciprocity.