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Use Hard Trends to Create Your Company’s New Cash Cow

Most companies begin with a flash of foresight that leads to an innovation. They come out with a new product or service that satisfies an unmet need, or better yet, a need that customers can’t live without, and then focus on growing their “cash cow.” Of course, a cash cow is a company’s major source of money. They then “milk” the cash cow for all it’s worth. If they’re smart, they create some additional cash cows, but that isn’t always the case.
We saw much of this scenario play out with Google, a company that was founded with a strong focus on innovation. Their initial cash cow was built on a new way to bring in advertising dollars around search. And one of the great things that Google did was to keep the pipeline of innovation going by encouraging the Google engineers to spend 20% of their time coming up with new ideas. They even provided resources for the engineers to be creative. The result? It yielded lots of great stuff from Google, including Gmail, Chrome, and many other advances.

Falling Behind Can Happen Fast When You Focus On Your Competition
Predictably, based on hard trends, we can see that the main computer people use has been shifting from a laptop/desktop to a smart phone or tablet. And even though that shift started happening just a few short years ago with Apple’s launch of the iPhone, the reality is that it was very predictable.  For example, increasing and predictable advances in processing power, storage, and bandwidth have been in play for many decades.

So what did Google do when Apple changed the game by launching the iPhone? They reacted by innovating, and copying to a degree, and came out with the Android operating system that could work on a variety of manufacturer’s smart phones. Unfortunately, Google didn’t create a game-changing innovation as Apple did; they were instead playing Apple’s game, and that’s never a good place to be for a company that wants to lead.

At the same time there was another predictable hard trend, social media, that was not being addressed by Google’s innovation engine, and that gave Facebook time to rapidly become a giant in that market. And this was where it looks like some bigger mistakes started to occur, mistakes that many companies that have a great cash cow make. Google shifted their focus from “innovation” to “beating the competition.”

One of the problems of focusing on the competition is that you end up competing with them. In contrast, when you focus on innovation, you become the competition. That’s a big difference.

Realize that when you try to copy someone, you can never really catch up, because the leader is constantly innovating. Unless you manage to jump ahead in a big way, you’re always behind. And that’s what happened when Google released Google+, their counter to Facebook. It’s very good, but there is too much copying and trying to catch up with Facebook and not enough game-changing innovation.  

Unfortunately, the company was so focused on winning the social media game that all of the engineers were told to put their innovation around social. In other words, they were told to spend 20% of their time focused on innovation, so long as that innovation was aimed at social media. This mandate, of course, diluted their innovation engine. A better approach would have been to jump ahead—to use hard trends to look where social media is going and innovate there to create a new bouncing baby cash cow.  

Using Hard Trends to Jump Ahead
Where is the web and social media going? Well, it started with search, what has been called Web 1.0. Of course, Yahoo started that long before Google, giving us access to information. Then Web 2.0 came along with the key focus being content sharing and social media.
Back in 1993 I wrote about this shift in my book Technotrends, and I said that when our devices (phones and computers) become true communication age devices, so that we can use them for informing and communicating (think smart phone), then we’d have another major revolution. And, of course, that’s exactly what Apple helped to spur when they came out with the iPhone and gave us a true communication/information age device. They combined the information age and communication age.

What’s next? If you use the predictability of hard trends to look ahead, which is what I’d like Google to do, you’ll see that we’re embarking on Web 3.0, which is all about immersion. It’s the 3D experience. But I’m not talking about 3D as we’ve known it for years, where you have to put on special glasses. That’s too cumbersome.

I’m talking about using our primary personal computers—our tablets and smart phones—and having a fully-immersed 3D experience where you go into environments (think X-Box gaming), as well as having things stick out at you, like when you wear the 3D glasses. As it turns out, you can have that experience on some hand-held gaming devices right now, without having to wear glasses.   

So let’s turn this around to Google. What innovation is waiting for them to seize? How about a 3D web browser? That would be a game-changing innovation. That could create a platform for a big new cash cow!

Why? Because web pages right now are like a flat piece of paper, except they have a hyperlink and perhaps an embedded video. So we can watch a video, but it’s a flat video—it’s not 3D. But what if we had a 3D browser and didn’t just look at a web page, but actually went into it and experienced it? Now that changes the game.

Let’s then look ahead even more. After Web 3.0 is Web 4.0, which is all about intelligence—the personal assistant. Apple has already started this with Siri, where you can talk to your smart phone and your intelligent agent tells you the answers. And, of course, Siri will get smarter every year.

Could Google have done what Apple did before Apple? Yes. In fact, they already had the ability to do so with their Google search App. In fact, most iPhone users already loved it, where you could type or say, “Where is a restaurant in Del Mar, California?” and then Google would send you to a website. Imagine if they would have added the Siri capability of responding to you in voice before Apple. It would have helped them jump ahead rather than once again copy Apple.

The point is that Apple used the predictability of hard trends to innovate outside of their core. Because they were focused not just on one thing—not just on computers or smart phones or tablets—but rather on innovation, they were able to jump ahead. They were not focusing on what the competition was doing. They were looking in front of them rather than at what everyone else was doing.

By the way, Google did come out with their e-personal assistant shortly after Siri was launched. Agility, the ability to react fast is good, but it keeps you behind, playing the catch-up game, and that’s a hard game to win..

Crank Up the Innovation Engine Using Hard Trends
What I’d like to see Google and all companies do is to get back on the innovation bandwagon. Yes, social is big and will continue to grow, but there’s far more ways to create game-changing innovations than that.

So here’s the moral to all this: Don’t just milk your cash cow. True success comes when you focus on innovating versus imitating, anticipating versus reacting. So use the hard trends to create some new bouncing baby cash cows. We’re in a new world of technology-driven transformational change. The playing field has been leveled, and the game is changing fast. It’s time to stop playing the old game, or someone else’s game, and start defining the new one.


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