Beyond Dead Reckoning

We’re afraid of technology development because it’s risky. And figuring out where to go is the risky part. To figure out where to go companies use several strategies: advance multiple technologies in parallel; ask the customer; or leave it to company leader’s edict. Each comes with its strengths and weaknesses.

I think the best way to figure out where to go is to figure out where you are. And the best way to do that is data-driven S-curve analysis.

To collect data, look to your most recent product launches, say five, and characterize them using a goodness-to-cost ratio. (Think miles per gallon for your technology.) Then plot them chronologically and see how the goodness ratio has evolved – flat, slow growth, steep growth, or decline. The shape of the curve positions your technology within the stages of the S-curve and its location triangulated with contextual clues. You know where you are so you can figure out where to go.

Here’s what the stages feel like and what to do when you’re in them:

Stage 1: Infancy – New physics are used to deliver a known function, but it’s not ready for commercialization. This is like early days of the gasoline-electric hybrid vehicles, where the physics of internal combustion was combined with the physics of batteries. In Stage 1 the elements of the overall system are established, like when Honda developed its first generation Honda Insight and GM its EV1. Prototypes are under test, and they work okay, but not great. In Stage 1, goodness-to-cost is lower than existing technologies (and holding), but the bet is when they mature goodness-to-cost will be best on the planet.

If your previous products were Stage 4 (Maturity) or Stage 5 (Decline), your new project should be in Stage 1. If your existing project is in Stage 1, focus on commercialization. If all your previous projects were (are) in Stage 1, you should focus on commercializing one (moving to Stage 2) at the expense of starting a new one.

Stage 2: Transitional – A product is launched in the market and there is intense competition with existing technologies. In Stage 2, several versions of new technology are introduced (Prius, Prius pluggable, GM’s Volt, Nissan Leaf), and they fight it out. Goodness-to-cost is still less than existing technologies, but there’s some element of the technology that’s attractive. For electric vehicles, think emissions.

If your previous products were Stage 4 (Maturity) or Stage 5 (Decline) and your current project just transitioned from Stage 1, you’re in the right place. In Stage 2, fill gaps in functionality; increase controllability – better controls to improve battery performance; and develop support infrastructure -electric fueling stations.

Stage 3: Growth – Goodness-to-cost increases rapidly, and so do sales. (I think most important for an electric vehicle is miles per charge.)

If you’re in Stage 3, it’s time to find new applications – e.g., electric motorcycles, or shorten energy flow paths – small electric motors at the wheels.

Stage 4: Maturity – The product hits physical limits – flat miles per gallon; hits limits in resources – fossil fuels; hits economic limits – costly carbon fiber body panels to reduce weight; or there’s rapid growth in harmful factors – air pollution.

If you’re in Stage 4, in the short term add auxiliary functions – entertainment systems, mobile hotspot, heated steering wheel, heated washer fluid; or improve aesthetics – like the rise of the good looking small coupe. In the long term, start a Stage 1 project to move to new physics – hydrogen fuel cells.

Stage 5: Decline – New and more effective systems have entered their growth stage – Nissan Leaf outsells Ford pickup trucks.

If you’re in Stage 5, long ago you should have started at Stage 1 project – new physics. If you haven’t, it may be too late.

S-curve analysis guides, but doesn’t provide all the answers. That said, it’s far more powerful than rock-paper-scissors.

(This thinking was blatantly stolen from Victor Fey’s training on Advanced S-Curve Analysis. Thank you, Victor.)

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Mike Shipulski Mike Shipulski
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