One issue that is likely to haunt some of the high-flying tech and game companies that are currently doing wonderfully is their reliance on data and analytics can inhibit innovation. Clayton Christensen, the esteemed Harvard professor who wrote the seminal work on innovation, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail, explains how deep customer understanding works against strong firms keeping up with innovators in their space. The use of data and analytics to understand and anticipate customer needs is now the driving force behind most of the exciting tech and gaming companies. This strength, however, could leave these companies vulnerable to new competition and turn today’s stars into tomorrow’s duds.
The Innovator’s Dilemma
To understand the situation data reliant companies will find themselves in it is important to understand first the innovator’s dilemma. Although I will blog about it in more detail this year, (I will not try to capture all the nuances of Christensen’s book; I strongly recommend you read it for yourself), the underlying thesis is that often great companies fail to be the disruptive innovative force in their industry because they have such a deep understanding of their customer’s needs they do not see disruptive opportunities that initially cater to other users. Instead, they continually create better products for their customers, which sustains technology but cannot disrupt. Disruptive companies come in with a simpler technology that aims at a different market, gains traction there and then encroaches on (and eventually destroys) the established firms. This cycle has been repeated in multiple industries. As Christensen writes, “blindly following the maxim that good managers should keep close to their customers can sometimes be a fatal mistake.” Continue reading “Data and analytics: the enemy of innovation”
The Business of Social Games and Casino 