INNOVATION ZEITGEIST: DIGITAL BUSINESS

TRANSFORMATION IN A WORLD OF TOO MANY

COMPETITORS

Publication date: June 2013

Amazon Kindle E-Book

Author: Alistair Davidson

Picture and text, copyright Alistair Davidson, 2013. All rights reserved.

THE INNOVATION ZEITGEIST THESIS

When the cost of innovation goes down, the

number of similar innovations goes up

When the cost of reaching customers goes

down, the easier it is to launch a product

The result is more similar products being

offered as a result of parallel development

6/23/2013Innovation Zeitgeist Book Summary

THE PROBLEM

The strongest predictor of new product

success is offering a differentiated high value

product

If you offer a me-too product, your probability

of success is lower

Therefore, in an Innovation Zeitgeist market,

new product launches are more at risk

6/23/2013Innovation Zeitgeist Book Summary

NEW INNOVATION APPROACHES NEEDED

The key question: how are you different from

your current or likely competitors?

For many companies, the uncomfortable

answer will be that they are not different

6/23/2013Innovation Zeitgeist Book Summary

ALTERNATIVE INNOVATION

Product

Process

Procurement

Customer selection

Business model

Monetization

Digital rights bundling and unbundling

Privacy policy

Acting on behalf of customer and being trusted

6/23/2013Innovation Zeitgeist Book Summary

EVOLVING VALUE PROPOSITIONS

Delivering emotions, stories and insights

Product Service Solution Experience

Competing on features and value proposition

Competing on involvement in delivering solution, and on pricing model

Taking responsibility for workflow and/or outcomes

6/23/2013Innovation Zeitgeist Book Summary

CUSTOMER PRIMACY STRATEGY

In a world where a company’s behavior is

transparent, acting on behalf of customers is

likely to be an increasingly important

positioning and creator of value

What you did in the past may have been

legal, but it will not win hearts and minds

With lots of competition, you need to have a

deep trust relationship with customers

6/23/2013Innovation Zeitgeist Book Summary

TECHNOLOGY REDEFINES DIFFERENTIATION

Digital content can be sold using some

combination of six basic monetization models

Purchase

Rental

Subscription to a pool of digital assets

Advertising supported

Sponsored

Product placement

6/23/2013Innovation Zeitgeist Book Summary

BUNDLING AND UNBUNDLING OF RIGHTS

Digital assets offer more flexibility for

differentiation from bundling and unbundling

of rights and attached services

Play

Buy

Lend

Resell

Pass to heir

Instant purchase

Play

Download

Archival storage

Re-download

Stream

Cross media bookmarking, e.g. Audible and Kindle

Cross device access

Cloud

storage+

6/23/2013Innovation Zeitgeist Book Summary

DIGITAL BUSINESS MODEL + RIGHTS AND

SERVICES IS A POTENT COMBINATION

Monetization Books Music Software Video

Purchase Physical books CDs, vinyl

iTunes, Amazon

Disks, download iTunes, Amazon, retail

generally

Rental Textbooks or innovative

1-time read

Downloadable music

from subscription

services

Games iTunes, Amazon

Subscription Amazon Prime

Spotify, Rhapsody,

Apple

Netflix, Amazon Prime

Advertising supported Spotify Songs used in

commercials

Apps with advertising for

free versions

TV, Hulu

Sponsored NY Times subscription

and WSJ have been

sponsored by auto

compahies

Free apps that increased

demand for products or

services

TV, Hulu

Product placement Common in movies

Monetization and Business Models

Note: purchased digital assets are typically sold under license agreements and are

not transferable.

6/23/2013Innovation Zeitgeist Book Summary

EXAMPLE RIGHTS FOR (UN)BUNDLING

Quality, e.g. SD, HD, 3D

Upgradeability, e.g. right to next upgrades

Media,

Archival storage and re-download

Archival storage and streaming

Inheritability

Privacy Anonymous or social networking posting

Multiple formats e.g. physical media and streaming, e-book and audio-book

Commissions for resale or referral

6/23/2013Innovation Zeitgeist Book Summary

BOOK INFORMATION

Title: Innovation Zeitgeist: Digital Business

Transformation in a World of Too Many

Competitors

Author: Alistair Davidson

Available at Amazon.com as Kindle book

6/23/2013Innovation Zeitgeist Book Summary

CHAPTERS 1

The New Innovation Zeitgeist World

Enter the Chief Digital Officer

Rethinking the Digitized Business

Consensus and Vision

Grabbing Attention and Obtaining Usage

The Competitive Glut

Types of Innovation in a Zeitgeist World

The Most Important Predictor of Innovation Success

Club Med, the Marines and Software Usage

The innovation Smorgasbord

6/23/2013Innovation Zeitgeist Book Summary

CHAPTERS 2

Getting Above the Noise

Signals and Portents

Industry Restructuing and Delivery Models in a Zeitgeist World

Innovation Strategies in a Zeitgeist World

The Soapholder Effect: Why Acting on Behalf of your Customers Might be Your Next Strategy

TCO, TVO, TCR and TVR

Agile Demand Creation

Sales Strategy in a Zeitgeist World

Accelerating Innovation in New Areas

6/23/2013Innovation Zeitgeist Book Summary

CHAPTERS 3

Zeitgeist Work Culture: Employee Value and Values

From Traditional to Digital

Privacy as Differentiator

The Digital Transformation of Sustainability and the Consequences of Consequences

Modeling the Zeitgeist Environment

Exponential Modeling of Viral Marketing and Improvement Cycles

Guidelines for Product Development in a Zeitgeist World

Performance improvement in a Zeitgeist World

6/23/2013Innovation Zeitgeist Book Summary

CHAPTERS 4

Acquisitions, Scale and Disruption in a Zeitgeist Market

Toolboxes, Program Officers and Learning From Failure

Big Data and its Implications for Digital Transformation

Counter Intuitive Zeitgeist Marketing and Intelligent Invisible Technology

An Afterthought: Digital Tribes

Competitive Advantage in a World with Zeitgeist Innovation

Innovation Glossary

6/23/2013Innovation Zeitgeist Book Summary

REVIEWS 1

"Alistair Davidson has written an ambitious, encompassing, and down-to-earth treatise on the current digital transformation. It’s the best description yet of the digital transformation engulfing us and what we should do about it, written in plain language and illustrated with his own photographs and questions for the reader after every chapter. An iconic, original contribution to the literature on digital transformation that is hard to put down. There is good advice and commonsense written on every page. Must reading." Stanley Abraham, Professor of Strategy and Entrepreneurship (Emeritus), Cal Poly Pomona University, author of “Strategic Planning: A Practical Guide for Competitive Success”.

"Innovation Zeitgeist is essential reading for any venture capitalist or startup. It forces the reader to consider what they are doing and what they must continue to do that is different than their many domestic or international competitors, a critical issue for successful startups and for high growth companies." Norm Fogelsong, General Partner, Institutional Venture Partners

“Alistair Davidson has produced an insightful analysis of innovation in the digital era. This book is a must read for executives seeking survival and success in today's challenging competitive arena.” Robert Allio, founding editor of Strategy & Leadership magazine, former Dean of Rensselaer School of Management. Author of “Seven Faces of Leadership”.

“A.T. Kearney's clients are all facing the issue of their business being transformed by digital technology. Innovation Zeitgeist is a great resource for helping our Digital Business Forum clients understand how important it is to actively scope and manage the changes to their business, organizational structure, acquisition strategy, business model and required innovation approaches.” Michael Roemer, Partner and International Co-head of A.T. Kearney Digital Business Forum

6/23/2013Innovation Zeitgeist Book Summary

REVIEWS 2

“Mr. Davidson has a knack for bringing the thirty-thousand foot practice of strategy down to earth. His discussion of strategic considerations leads directly to an actionable planning structure. Strategy, then, can form a tactical plan. The benefit of the book is twofold: food for thought and a framework for action.” Bruce Rosebrugh, President, VPQ Scientific

"In Innovation Zeitgeist, Alistair zeroes in on many of the key issues we see our market research service-industry clients facing - rapidly changing customer expectations, the need for rapid service introductions, more competition, a need to rethink business models and the types of innovation pursued." Jim Hollingsworth, VP Finance and Security, Pacific Consulting Group

“Bravo! Innovation Zeitgeist offers deep yet pragmatic ideas to address today’s business challenges. Alistair Davidson’s depiction of trends dramatically altering the competitive landscape such as technology overabundance and customer attention scarcity hits the nail on the head.” Adrian C. Ott, author, “The 24-Hour Customer”; CEO, Exponential Edge Inc.

6/23/2013Innovation Zeitgeist Book Summary