April 5, 2005

Anticipating the market in the IT world

Author: John Katsaros and Peter Christy, Internet Research Group

Editor's note: This is an excerpt from the new book, "Getting It Right The First Time," by John Katsaros and Peter Christy.

As Yogi Berra said, "You can observe a lot by watching!" Anticipating the future is the single most important factor for success in information technology. Anticipating the future is also a major problem for innovative companies, because traditional methods of market research are not effective at predicting the disruptive changes that high-tech innovation brings.

In his best-selling book, "The Innovator's Dilemma," Clayton Christensen cites this as Principal #3 of disruptive technology: Markets that do not exist cannot be analyzed. That is a very important statement, because what he is telling innovators is that the most important thing they should be looking for is a disruptive opportunity and then turning around to note, by the way, that you cannot analyze its impact -- because the market does not yet exist. Although we completely concur about the potential importance of disruptive change, we differ in that we believe those future markets can be analyzed.

Christensen is absolutely right that you cannot analyze markets that do not exist -- using traditional methods of market research and analysis. But that is because traditional tools -- focus groups, quantitative studies, surveys, and the like -- were all developed to study markets that do exist. If you are running a research business, there is much more money in researching things that do exist than things that do not, so not surprisingly that is where the research tool and methodology efforts have gone first. Our point is simple: You can indeed understand markets that do not yet exist if you are willing to use some new methods and are willing to go patiently through the process of looking "under the radar'' for evidence of the elements needed to ignite a market.

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