Timing Is Everything

A former chief technology officer of Hewlett-Packard recently shared the profound observation with me that “the difference between a good idea and a great one is timing.”

So true.
​
While (too) much attention is often given to the dangers of being late to market — as HP assuredly was with its ill-fated and short-lived tablet computer — it can be just as deadly to prematurely enter a market before the technology, cost, or operational requirements are ready to deliver a viable consumer value proposition.
To put the issue of launch timing in context, recall that every new product launch must overcome three inherent risks to become a market success:

1. Technology risk
   Successful new technologies have to work reliably and as intended.  Technology viability is by far the most common risk associated with new product development and applies to the countless ideas that appear promising in theory, but never make their way out of R&D.  Last I checked, eternal youth and teleportation remain examples of this type.  Tens of thousands of promising but ultimately ineffective drug compounds are more prosaic examples that chronically bedevil pharmaceutical companies.
2. Operational risk
   Even if an underlying idea is technically sound, companies must be able to successfullyoperationalize the business around the new technology.  Webvan — one of the pioneers of online grocery services —  is an example of the failure to build a financially viable business around a proven technology: automated pick-and-pack grocery warehouses.  What brought Webvan down was overly ambitious expansion, which distracted the company from ironing out the basic operational requirements for on-time, cost-effective home delivery.  By the time Webvan crashed and burned, it had squandered about $1.4 billion of VC investment and IPO proceeds. On a smaller scale, NYC’s bike-sharing program is currently experiencing teething pains in establishing reliable operations.  Time will tell if New York can match the success of comparable bike-sharing programs throughout Europe.
3. Market acceptance risk
   Even if the first two hurdles, can be overcome, the final risk factor to be managed for a successful new product launch is consumer acceptance.  There have been some legendary (and expensive) technology flops of this type that make for delicious schadenfreude.
   
   ​Consider for example the the Iridium satellite phone system that promised to deliver mobile communications capability anywhere on the planet, from the middle of the ocean to the depths of the Amazon jungle.  The audacity of this technology when first announced by Motorola in the early 1990’s was awe-inspiring.  But by the time Iridium launched in in 1998, consumers quickly recognized devastating flaws in Iridium’s value proposition:

• Iridium did indeed work well on a ship’s deck in the middle of the ocean, but not at all in enclosed structures, — like buildings and automobiles
• The handheld unit was a three pound brick that required an ungainly large external antenna and large battery pack for prolonged use
• The handset cost around $3,000 and airtime charges ran as much as  ~$5 per minute.

After $5 billion of investment, Iridium declared bankruptcy within nine months of launch.

Another example of a great idea in theory, that failed to deliver an attractive value proposition, is the Segway.  Hailed as a revolutionary product that would change the world when first introduced by inventor Dean Kaman in 2001, consumers never could figure out why a $3,000 motorized scooter (banned from operating on most big-city sidewalks) made any sense.  The world may have changed over the past decade, but largely without the ubiquitous presence of Segways.

Overcoming risks
On a brighter note, it is possible to overcome initially negative market reactions to new product concepts, as some of the most successful current products (or those intriguingly on the horizon) demonstrate.  Consider the following:

• Apple iPad
  Apple recently announced shipping it’s 100 millionth iPad, but the company was certainly not the first to market a tablet computer when it launched in 2010.  In fact, Microsoft and others had tried to develop this market ten years earlier, with no success.  And, one might even argue that the Newton — a cross between a PDA and tablet, introduced in by Apple in 1993 — represents an even earlier failure to gain market acceptance for tablet 

The reasons underlying Apple's success with the iPad have been well documented, including thoughtful design and UI, technical refinement (e.g. battery life, screen resolution), the availability of hundreds of thousands of apps and a huge installed base of step-up iPhone users.  All of this boils down to great execution and timing. Steve Jobs had an uncanny sense of not only what, but when to introduce new technology.

• E-books
  A similar story played out in the digital book market.  The first renderings of e-book readers were launched by Rocket, Sony and others as early as 1998.  But it wasn’t until Amazon delivered Kindle’s one-click access to hundreds of thousands of ebooks available on Amazon.com, appealing to its installed base of millions of book buyers, that e-book sales took off.  Amazon had been working on the Kindle for five years prior to its 2007 launch to iron out the technology, business model, operations and contracts ensuring widespread access to digital books.  Their patience was rewarded; the original Kindle sold out within hours launch and remained oversold for months to come.  Again, timing dictated when Amazon could successfully manage the risks associated with this new product technology, leaving first movers in the dust.
  
  
•  Apple Watch
  One of the more intriguing products on the horizon today are “iWatches” — wristwatches that synch via Bluetooth to mobile devices (phones and tablets) to display timely information like text messages, weather — and yes, even the time — in a convenient format.  The Pebble watch earned notoriety to become the highest funded project on Kickstarter, garnering over $10 million from ~69,000 investors within 5 weeks of initiating crowdfunding.  In addition, many technophiles are currently agog at the prospect of an iWatch from Apple as their next new thing.  But neither Pebbles nor Apple are pioneers in this category, as iWatches first appeared from Tissot, Swatch and others in 2003, powered by Microsoft’s network, carried over FM radio broadcast signals in selected metropolitan areas.  The original iWatches cost as much as $800 and required a network subscription of $59 per year.  Within a few years, iWatches were discontinued, having never generated much market interest. The Pebble and rumored iWatch may find their impending launch timing more favorable, as ubiquitous wifi/4G network availability and the support of a large apps developer community will enhance functionality and coverage.
• SodaStream
  The record for persistence in finding the right time to trigger broad-based market acceptance for an unconventional product may go to SodaStream — a 110 year old company that sells beverage-making systems for home carbonated soft drink consumption.  Founded in England in 1903, the company made little market headway under seven different corporate owners during its first listless century, and was on the verge of bankruptcy in 2006 when the company was purchased by an Israeli private equity company for $6 million.The strategic breakthrough came when the new CEO, Daniel Birnbaum recognized the potential for SodaStream to sell soda makers as a lifestyle product that tapped into several global market trends, i.e., consumers’ desire for products that deliver convenience, sustainability, health & wellness, personalization and value for money.  Birnbaum aggressively repositioned SodaStream’s product line with upscale designs and features, added new flavors and packaging conveniences and aggressively advertised the broader value proposition in global markets.
  
  The company IPO’d in 2010 and has been its growing top and bottom line by 40+% per year ever since. SodaStream’s transformation from a money-losing, nearly bankrupt company in 2006, to a highly profitable global category leader with sales of nearly $600 million and a market cap over $1.5 billion in 2013 is yet another example that timing can play a key role in turning good ideas into great ones.