- In the late 1970s, Steve Jobs and Steve Wozniak
weren't the only crazy people
imagining that individuals, even children,
might want to buy and use computers.
A similar idea was being pursued
by engineers at Digital Equipment Corporation,
the world's second largest computer company after IBM.
Ken Olsen, DEC's founder and CEO,
was revered as a technology entrepreneur,
yet in 1977 when engineers presented Olsen
with the prototype of a PC,
he dismissed them with a now-famous observation.
"There is no reason for any individual
"to have a computer in his home."
The idea of a personal computer was just too wild,
obviously Jobs and Wozniak thought otherwise.
The rest is history.
Apple has gone on to become
the world's most valuable company, a loss that is no more.
In 2000, Tata Motors
controlled about 50% of India's market for trucks.
While the company looked for ways
to further increase its market share,
it was especially keen to expand the overall market.
This led to a search for entirely new opportunities
beyond the horizons of every player in the industry.
Managers at Tara Motors
converged on rural farm workers as a possible target.
Many of them would like to be
owner operators of small trucks,
yet the smallest such vehicle cost $10,000,
more than twice what a rural worker could afford.
The Tata Motors team set itself a challenge.
Develop a mini truck
that would meet European safety standards
but sell for only $5,000.
The team at Tata Motors conducted 4,000 interviews
to zero-in on the features and functionality
that would be core to the target customers.
Everything else would be treated
as bells and whistles to be included only
if the selling price would not exceed $5,000.
Tata Motors did it.
It developed the mini truck, Tata Ace,
that required innovation on all fronts.
Launched in 2005, the Ace was an instant success.
70% of the buyers were first-time truck owners.
It had the new segment all to itself
for more than five years and continues to benefit
from being the first mover in this market.
The Apple PC and Tata Ace illustrate
how companies can open up entirely new market opportunities
by a dramatic re-imagining of the target customer.
So, how might you be able to do something similar?
First, start by identifying
a number of currently underserved markets
for your industries' mainstream products and services.
Perhaps one of them might emerge as a viable option.
If you currently sell to businesses,
could they also be opportunities in the consumer space
or vice versa?
If you sell to women, could there also be a market for men?
If you sell to children,
might there also be a market for adults?
If you sell in the US and Europe,
might there also be opportunities in emerging markets?
For example, take delivery by drones.
Given their weak physical infrastructure,
emerging markets may well offer significant opportunities.
Next, analyze why the potential markets
are currently beyond the industries' worldview.
Is it because the price is too high?
The functionalities too advanced?
And the product too complex?
Or does the product need more advanced features
and greater functionality?
Or some other factors?
Analyze the functions embedded
in the industry's current products.
Could a new customer base be created
by using only a subset of these functions?
Take edX, an online venture
launched by MIT and Harvard in 2012 as an example.
Through video courses and accompanying homework,
edX aims to make some of the professors' knowledge
available to a much larger audience
than could be admitted to traditional degree programs.
Finally, be open to rethinking the entire value chain.
The Apple PC needed different types of components,
different types of factories,
and a very different approach to marketing, distribution,
and sales as compared with mainframes.
Every innovation requires looking outside
of today's worldview and today's boundaries.
This also applies to who the target customers could be.
Always be on the lookout for opportunities
to convert today's ignored markets
into tomorrow's core customers.