Tracking Technology To Identify Opportunities

By Dorian Simpson

Identifying the appropriate time to embrace new technology can make or break your company. Too early and you’ve wasted loads of money educating your competitors. Too late and whoops, there it went! This article will explore:

1. Guidelines for tracking technology trends."

2. Pitfalls to look for.

Trend? What trend?

I always equate watching a technology trend with taking a train when you don’t know the schedule. If you board at the station, sure it’s easy to get on, but when is the thing going to move? Alternatively, you could pass the time waiting. But if you get too comfortable, the train will take off before you know it and there you will be, waiting even longer for the next train. 

One of my experiences with a “bet the company” trend occurred while I was with General Instrument, one of the founders of HDTV (read Joel Brinkley’s “Defining Vision” for a great account of HDTV’s development). HDTV seemed to be a sure thing in 1995 with a government mandate to switch technologies, a clear industry standard (ATSC), and overt consumer advantages. But a closer look revealed problems, including a deep reliance on multiple system components, high HDTV television prices, and studio reluctance to change production equipment. These challenges made it a poor hand on which to bet significant resources. Many of these factors have now come into line making adopting HDTV today a reasonable bet for some market segments.

While there is no right answer to “when is the right time to adopt”, here are some guidelines for evaluating technology trends so that you are not standing on the track looking the wrong direction as a speeding trend barrels toward you.

Set up a tracking mechanism

Since not everyone can follow every trend, identify which companies are tracking which trends and how and when they will be discussed. Often a CTO may watch development of technology standards, Engineering will track technology curves, and Product Marketing will track product segment trends. This is a good start, but how will these get combined to identify when to really pay attention?

One option some companies employ successfully is to use product review meetings, or other discovery events, to track trends, discuss their ramifications, and identify them as opportunities vs. threats. Tag someone to document the state of each trend, ideally using criteria you’ve established, and then track the updates meeting to meeting. A 30-minute discussion each quarter can lead to deeper discussions as necessary.

Know your action criteria

What should you be looking for to know the right time to jump on a trend? While this will depend on your strategy, merely identifying the important variables, how to obtain them, who will track them, and discussing them will help you know the right time. Some variables you may want to consider when tracking technology trends are: 

1)   State of the Technology – Is it ready for prime time, or at least ready to make a reliable product with an acceptable risk?

2)   Standard status – Has the technology become a sanctioned standard, meaning it has change control and interoperability?  Will your organization wait until it’s approved or do you want an early lead?

3)   Major system dependencies – If the new technology has significant dependencies, which of these are important to your decisions?

4)   Market leaders/Fringe leaders adoption – Are the market leaders adopting the new thing? If so, it may be too late to get an early-bird advantage. If there are only a couple of fringe users, it may not be the right time.

5)   Economics – When does the new technology offer superior cost/performance benefits? Think backwards regarding when to incorporate it into your products.

Some Questions to Ask

In addition to discussing the above variables, ask some of the following questions during your reviews to look for threats or opportunities.

1)   How many new players have adopted the technology this quarter?

2)   What would we do if our competitors announced this tomorrow?

3)   What new benefits does this offer our customers and what specific products could take advantage of this?

4)   If the market leader adopted the technology tomorrow, what would that mean?

5)   If the technology were improved by 2X and was 2X cheaper in 6 months, what would this mean?

Some Pitfalls

One pitfall is your own “reticular activator”. You may be watching a trend, such as the 802.11g Wi-Fi standard and just by the fact that you are watching it, it seems that everyone is adopting it! It’s everywhere you look!  This is your reticular activator working overtime (the part of your brain that starts noticing things once you are aware of them.  Looking to buy a Porsche?  Hmmm… everyone seems to be driving Porsches). Is it accurate?  Perhaps.  It’s good that you’re watching the trend, but try to quantify the trend as much as possible to get a better reading.  Sometimes an impassioned advocate may lead you to new technology ahead of its time.

Another challenge you may face is ego.  It’s cool to be the first one adopting the latest technology, particularly if you’re one of the developers.  But beware of the “first mover road kill" theory. It doesn’t pay off to be a pancake on the highway when a little patience can put you ahead of the game later.

The Bottom Line

Done