What's Your Company's Cash Cow?
Most companies begin with a flash of innovation. They come out with a new product or service customers can’t live without and make their mark with 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 very focused on innovation. Their initial cash cow was the 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.
Where Has the Innovation Gone?
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 two short years ago, the reality is that it was very predictable.
So what did Google do? They innovated and copied to a degree and came out with the Android. Unfortunately, it was more copying than innovating. Don’t get me wrong…there was some innovation, but it wasn’t as high-level of innovation as we had seen in the past.
Where Google was falling behind, of course, was in social media. Facebook had cornered that market. And this was where it looks like some mistakes started to occur, because 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 too much copying and trying to catch up with Facebook and not enough innovating.
Unfortunately, the company was so focused on social media 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 the innovation engine. A better approach would have been to jump ahead—to look where social media is going and innovate there to create a new bouncing baby cash cow.
The Future of the Web
Where is the web and social media going? Well, it started with search, what I call 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 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 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 fancy glasses. That’s too cumbersome.
I’m talking about using our main computers, tablets, smart phones, and games and having a fully-immersed 3D experience where you go into environments (think X-Box gaming), as well as having things sticking out at you, like when you wear the 3D glasses. As it turns out, you can have that experience on smart devices right now, without having to wear glasses. It’s already happening in the gaming world.
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 innovative. That would be a 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 get answers. And, of course, Siri will get smarter over the years.
Could Google have done what Apple did? Yes. In fact, they already had the ability to do so with their mapping feature, where you could type in “Where is a restaurant in Del Mar, California?” and then Google would send you to a website. Imagine if they would have made it something you talk to…and that responds to you in voice.
The point is that Apple innovated outside of their core. Because they were focused not just on one thing—not just on smart phones or tablets—but rather on innovation, they were able to jump ahead. 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. So what are they doing? They’re playing the catch-up game…yet again.
Crank Up the Innovation Engine
What I’d like to see Google and all companies do is to get back on the innovation bandwagon. Everything isn’t social. Yes, social is big, but there’s far more to it than that.
So here’s the moral to all this: Don’t just milk your cash cow. True success comes when you create some new bouncing baby cash cows, and you do that by keeping your focus on innovation. We’re in a new world of exponential transformational change. The playing field has been leveled, and the game is changing. It’s time to stop playing the old game and start defining the new one.
Daniel Burrus, one of the world's leading technology forecasters, business strategists, and author of several books
Copyright 2012. Author retains copyright. All Rights Reserved.
