SAST Wingees

Apple’s Innovation Method – Part 3

Prolog

Please read Part 1 of this series & Part 2 of this series to understand the context better.

When do SIPs not work?

I finished my previous post with this question. Let us pick 2 examples – Tata Nano and Pfizer’s Exubera –  inhaleable Insulin, both of which used a Seemingly Impossible Problem (SIP) strateg. Nano tried to make a car at an unbelievable $2500, whereas Pfizer attempted to make insulin inhaleable, so that millions of insulin-dependent diabetics around the world don’t need to use a painful injection.

Both mentioned customer problems – Nano designers thought that price of the car was the key barrier to adoption of cars and Pfizer thought that diabetics don’t want to prick themselves with a needle almost daily. Then they proceeded to create an SIP strategy around these problems. In both cases, they did manage to make the product and bring it to market. Pfizer’s product was a spectacular failure and the product was discontinued. Nano is not a spectacular failure, but it didn’t reach its potential.

Why?

[Note: While as an Indian I am proud of the fact that an Indian firm made an audacious project happen, I am writing this post from the perspective of someone who researches Innovation]

In the Nano’s case, while price is an important problem, they didn’t quite understand the bigger problems that a two-wheeler owner has – as a two-wheeler owner not too long ago, I have lived with these problems:

1. Where do I park the Nano? I could have afforded the Nano (just a slightly bigger EMI 🙂 ), but where would i have parked the Nano? My two-wheeler was simply slid under the stairs in my house.

2. What about the operating costs? Two-wheelers, even the worst, give a mileage of 50KM per liter of petrol, whereas the Nano under test conditions would give 21 KM per liter. When you add a car’s maintenance costs (changing oil etc), the operating costs of Nano are almost 2-3X of a two-wheeler’s operating costs.

3. Nano designers thought they could try to sell the car to rural consumers, but the roads are so bad that Nano’s build quality didn’t cater to those roads.

In the Exubera case,  while pricking yourself every day is a problem for Diabetics, the Exubera product uncovered problems that the Pfizer designers didn’t take into account:

1. One could get an injection done quickly within minutes and can do it discreetly. When one used the Exubera (look at the pic below), it was cumbersome and couldn’t be done that discreetly. The inhalation also was not that easy.

Pic Courtesy: NYTimes

2. the injectable insulin product has been around for a while and is available easily and inexpensively. Made it harder to convince people to carry a much bigger more cumbersome device and to pay more for the privilege.

Lessons Learnt

When we use an SIP strategy, we have to make sure the SIP is constructed around real problems the potential customers face, as opposed to imagined or not-so-well-researched problems. Apple Cube failed for the same reason – the main innovation was the fanless design (which was of course an SIP at that time). It turns out customers didn’t care that much about the noise from the fans and certainly weren’t willing to pay a lot more premium for that feature.

Apple is successful because they get their  SIPs right more often than not and hence have a string of successes (with a few failures of course).

I am concluding the series with this post. Hope you found it useful?

Epilog

I have done some more work around –  how to convert customer pain points into SIPs, how to identify customer pain points more effectively etc. I will write about that later at an appropriate time.