Where does value come from?
What makes people willing to pay $50 for a t-shirt that’s just like the one that ten other people are wearing in the club?
What makes people pay a premium for Apple products with features introduced by other companies months or years before?
If you are truly trying to be innovative, instead of creative or inventive, you MUST understand how your prospective customers assign value for the new solution you are about to introduce. This may require lots of customer interviews, ethnography, forced choices, and other upfront research, but it’s worth it, because if you don’t build your potential innovation on a new, unique insight then it has no chance of succeeding in the marketplace. And as I’ve said before, to achieve innovation you have to focus not just on creating value in the product or service itself, but all three sources of value:
- Value Creation
- Value Translation
- Value Access
So, let’s get back to the $50 t-shirt…
Here in Seattle we are proud of Macklemore and Ryan Lewis, who became a chart topping rap music music act by choosing not to follow the traditional way of making it in the music business so they could not only maintain their creative freedom, but also to make more money. Their mega-hit “Thrift Shop” pokes fun at fashionistas and has helped to make thrift shopping cool instead of embarrassing. Thank you to their combination of skills, they’ve been able to do a lot of the hard work themselves to promote their music, including making this video:
By remaining independent, Macklemore and Ryan Lewis are free to collaborate with whomever they want, when they want, and with sponsors who add value in specific ways consistent with the current project they are working on, instead of a record company extracting a rent from all the artist’s activities (whether they are adding value or not). Here is one such project they undertook with another local artist, Fences, and sponsorship from a company headquartered here locally – T-Mobile USA. It’s a great song and a pretty cool video if you haven’t heard or seen it before:
I for one am grateful that Macklemore and Ryan Lewis didn’t sign a record deal, and record executives have candidly admitted that they would have totally ruined the act by forcing them to change to be more “marketable.” The success of Macklemore and Ryan Lewis (and others) serve to highlight the disruption in the music industry value chain that continues to occur, creating discontinuities that artists like Macklemore and Ryan Lewis can take advantage of. This is of course as long as they have the digital and social skills to get the word out and help their music spread.
Is there disruption happening in your industry’s value chain?
How can you take advantage of the discontinuities?
Please note the following licensing terms for Stikkee Situations cartoons:
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Video may have killed the radio star, but the mp3 and even the CD have failed to kill the lovable vinyl LP record. In fact, they are making a resurgence and if anything have probably grown in popularity over the last decade.
It used to be that when you formed a rock band to seek fame and fortune, all you had to do was find a lead singer, a guitarist, a bass player, a drummer, and maybe another guitarist or a keyboard player if you wanted a richer sound. But the digital age presents a level of complexity and opportunity that John, Paul, and Ringo never had to deal with.