My Musings

June 10, 2011

AMPlify: Sidestep and Twist – Why innovation fails

Why are Amex and Visa popular when Diners Club was first to market with the credit card? How did Apple manage to corner an overwhelming share of the portable mp3-player business when the RIO, Nomad, and IXI came first? And whatever happened to Excite anyway?

James Gardner (General Manager at Spigit and a thought leader on innovation) believes he knows the answer. He suggests businesses that focus primarily on breakthrough discoveries feeding new innovation are rarely very profitable. But why? Isn’t holding first mover advantage the key to success?  James argues a contrarian view; suggesting it’s not the first movers who find success, instead it’s those that take existing breakthrough products or innovation and then improve the hell out of them.

Consider Apple and Microsoft. Both are absolute juggernauts in the technology world, but in recent times Apple has certainly held the upper hand with product breakthroughs such as the iPhone and iPad. But were these actually breakthroughs? Apple must have invested a huge amount in R&D to achieve this position ahead of Microsoft. Right? Actually the reverse is true:

R&D spend for top technology companies

So how does Apple spend a 1/10th of Microsoft’s research budget but still deliver exponentially greater success in bringing killer products to market? Simple: Apple doesn’t focus on true innovation; they simply bundle together the best bits of existing capabilities and add their in-house Cupertino magic on top industrial design and best-in-breed user interfaces. Apple never designed the individual components that make up the iPhone; they simple went to market with an idea and found suitable vendors (firms that had already put in the hard yards completing R&D) to deliver it. Think for a second the key differentiator that made the original iPhone such a standout device; that beautiful 3.5” touch screen. A Finnish Firm developed that. The brains of the device came from Qualcomm. Even the concept of the touch interface was copied… from Apple (does no one remember the Newton?).

Apple may not have been a true innovator when it came to the iPhone but they did play to their strengths by taking what was already available, having the vision to take a “sidestep” away from the current industry direction and placing their own “twist” on the devices customers were currently purchasing.

In business we often follow two approaches when developing new things for our customers; we either copy our competitors to the letter, desperately avoiding being left behind, or alternatively we spend eons developing new and costly advances in an attempt to get there first, only to watch our intellectual property ripped off wholesales six months after release (just like we do to our competitors).

Wouldn’t a better approach to this challenge be incremental and rapid development of new capability by taking the interesting bits of what is happening – both in our market and in the broader technology world – and then sidestepping the traditional copy and release cycle, instead focusing on innovation by degrees? By creating through sidestep and twist we can build new and better capability and get it market faster and for cheaper than ever before.

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  1. Reply

    Walter Adamson

    June 10, 2011

    Well written. Oddly enough I said something about this on Twitter yesterday, tagged with the #amplifyfest, and then spent the next 2 hours fending off the rants and attacks.

    And my point was actually less broad, just that the iPhone was a collection of previously developed commercial products and models, with Apple's true continuous innovation applied. This caused a storm, whereas the facts that the app store and music store and UX handset etc all existed and were operating elsewhere are ignored. My point was that just because someone doesn't know about these things does not mean that they do not exist. Apple certainly knew, and learnt from them.

    Apple did actually innovate, but not where people think. There big innovation was in the commercial models - with the music owners and in particular in getting out from under the dead hands of the telcos. The latter was massive, and had never been done before.

    I wrote this some time ago, on this topic: Why creativity is dangerous for business innovation

    Walter @adamson

    • Reply

      LongStraws Admin

      June 11, 2011

      Thanks for your detailed commented Walter. People do get a bit protective of Apple's image as an innovator, though I think they perform an even more nobel function - that of perfecter. While their efforts may not generate breakthrough innovation, their tweaking around the edges generate great products that force competitors to look for breakthroughs in order to keep up. In other words, If you can't beat apple at design, you need to to target another area of the game they are not currently playing in.

  2. Reply


    June 11, 2011

    Thanks for this post! There are plenty of examples of companies who place a premium on systematically innovating, through improved processes and increased value on the flow of new incremental or breakthrough ideas. They will maintain a competitive edge and hold the ability to dramatically change entire market landscapes in the future. Check out some case studies from GE, BT, Adobe, and others here:

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