Why value should come first and how it can lead to disruptive innovation
CHAPTER 2: LET’S TALK SUCCESS – measuring the right output.
Einstein once said, ‘Try not to become a man of success, rather a man of value.’
The difference between value thinkers and success thinkers may be even more crucial than we may think.
When success trumps value, we have the case of Kodak. Known for innovation, Kodak has been called “the Google of its day.” At one point Kodak captured 90% of the film and 85% of the camera sales markets in the U.S, selling up to 40MM cameras a year in 1997. Little did they know that by 2012 the company would go bankrupt, and by 2018 there would be 3B pocket cameras in the world.
Was Kodak unprepared for digital photography and taken by surprise?
Or is it simply the product of prioritizing success over value?
To many people’s surprise, the first digital camera was invented in a Kodak lab by Steven Sasson in 1975. When Sasson showed it to executives, Kodak’s management squandered it under the right belief that this finding would be their demise and eat all the profits from film.
Success and risk paralyzed Kodak, whose inertia, ironically, fed into their self-fulling prophecy. Success trumped value, until there was no more value, ergo no more success.
From market leaders to market obsolescent.
Looking back, one could say the same thing about the iPod. Let’s not forget Apple also sat on the verge of bankruptcy in 1998 just as Kodak had reached its peak. In fact, had it not been for Microsoft’s hefty investment of 150MM there would be no Apple at all.
Yet, what marks the difference between Apple, the world’s first trillion-dollar company, and the ‘former Google of cameras’, Kodak?
How did both companies reach reverse pivot points of growth and failure?
A leaders’ positive response to market risks and a value-thinking approach. Where Kodak management team squandered the digital camera in 1975, Steve Jobs would embrace the decline in ipod sales and launch two competing and profitable products: the iphone and ipad in the same period of time.
The difference between value and success thinkers can be described in the same way we use natural resources. To create energy, do we choose oil or the wind? In theory the same end but different means with different implications.
Another example of value over success is the case of Amazon. The world’s biggest store struggled to report a significant profit for the first 14 years. Jeff Bezos is notable for betting big on value over success, in every chance and every sense of the word, from brand value and product value to delivering a valuable user experience.
It is not easy to put value first because we must fight our instincts – risk aversion -- avoid losses because they’re more painful than winning. And when it comes to innovating and creating a new marketing category, there is no benchmark and there is no success in sight. There is only the high risk of drowning or swimming towards a current that doesn’t transform into a wave. All we see is a red ocean with a blue ocean in a far sight similar to Kodak. Whether we choose to swim towards it or not is what marks our pivot point.
Many times to put value first, is to bet on an invisible force that will slowly manifest and combust into a monsoon. For a surfer to be successful, he / she must swim with the current so when it breaks into a wave the person is in the perfect position to ride it. The surfer similar to value-thinkers have to bet on a current or wave that doesn’t yet exist.
It is a daunting task to swim towards a blue ocean when all we see is red, but do it.
CHAPTER 3: LET’S DRIVE GROWTH
As we drive and plan for growth, we should ask ourselves what means are we choosing to reach our end? What is that end: success or value? And how are we driving growth: by adding or multiplying?
Success is more than a function of sales growth and marketing is more than a cost. Value-driven Marketing is designed to create the right value. Use it wisely.
To quote Kaepernick: Believe in Something. Bet in Something Bigger than Yourself Today. Monsoons always start small. Big bets are sometimes small, and many times pass as invisible.
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