Nordic Track Book Club Review: Unleashing the Killer App

Unleashing the Killer App: Digital Strategies for Market Dominance by Larry Downes and Chunka Mui was published in March of 1998, yet I was surprised by the many forward-thinking concepts that I continue to see in much more recent marketing and product development books. Not a lot of concrete instructions for geeks on the ground, but still time well spent on the [NordicTrack] reading rack. 4-out-of-5 Nordic Track Ski Stars.

———————————

p.5 Less well-known than Moore’s Law is Robert Metcalfe’s law that networks dramatically increase in value with each additional node or user. And once a standard has achieved critical mass, its value to everyone multiplies exponentially.

p.8 We call this phenomenon the law of disruption, which states that where social systems improve incrementally, technology improves exponentially.  As the gap between the two increases, so does the potential for non-continuous disruption, indeed revolutionary, change.

In business, killer apps undermine customer relationships, distribution networks, competitor behavior, and economies of size and scale. To unleash killer apps, you must learn to see them coming and be prepared to put together whatever laboratories, partnerships, and new business models are needed to make quick use of them before someone else does.

p.18 Killer apps have important first-order effects, but their second-order effects are even more far-reaching as well as being unintended.  In 1976, for example, Gerald Ford offered Americans a toll-free telephone number that they could dial to share their ideas for “whipping inflation now.”  Little did he realize that the newly created “800” area code would soon revolutionize telephone sales and services.

p.24 According to Metcalfe’s law and magical points of reflection, the lower the initial price the more quickly critical mass is reached.  And ironically, once critical mass is reached, the developer can in theory charge subsequent users more, because the network effect increases the application’s value.

p.29 Computing, as Negroponte says in “Being Digital,” is not about computers anymore, it is about living.

We call it the law of diminishing firms.  As transaction costs in the open market approach zero, so does the size of the firm.

p.47 The US Department of Labor is already predicting that by the year 2005 the largest employer in the country will be “self.”

p.48 Information, like other public goods, is inexhaustible.  Information has an additional property that is unique.  Information actually increases in value the more people use it.

p.60 Every industry is going through a revolution in its use of information technology.

p.61 In the past technology was the “essential enabler” of change. But today, business change now originates with digital technology, in particular, with killer apps.

p.70 Given current forces, a company’s strategy can no longer be to tinker with its value chain (distribution, goods creation, human resources, etc.) Instead the CEO must find ways to alter it dramatically, if not destroy it altogether.

p.77 The 12 principles of killer app design.  Outsource the customer, cannibalize your markets, create communities of value, transactions as joint ventures…

p.80 Anything you can digitize, you can customize.

p.82 Customers reduce transaction costs by performing certain support services themselves.

p.86 Customers will help you on their own time when doing so is easy and the rewards–specialized or customized products, faster turnaround times, and even the sense of participation–are tangible.

p.95 Cable Television, we are constantly told, is becoming increasingly specialized as the number of channels increases, a trend known as narrowcasting.

Author Stan Davis calls this approach “mass customization” and nowhere is it more viable than in cyberspace.  Customers, in addition to doing their own product design, willingly part with marketing information that most organizations would kill (or worse, pay) to get their hands on.

Customers are willing to give away private data in proportion to the direct value they receive in return.

p.102 The closer you can get to activities about which the community feels passionate, the greater the potential value you can capture.

p.115 Every direct contact with the customer is an opportunity to improve the relationship and to learn more about the customer’s needs.  But most customer contacts offer little or no opportunity to do either.

p.133 The new forces will soon give rise to short-lived joint ventures that exist solely to complete one transaction, effectively replacing permanent organizations, long-term contracts, and strategic alliances.

p.134 It is not who you know anymore, but what.

p.141 You need to begin planning for the day which might come sooner than you think, when you won’t have a physical office at all.

p.160 The child sought to reassure the adult while he was playing the game, “Don’t let it bother you that you don’t understand. I just say to myself that I probably won’t be able to understand the whole game anytime soon, so I just play.”

[NordicTrackPic]

Article written by

A long time developer, I was an early adopter of Linux in the mid-90's for a few years until I entered corporate environments and worked with Microsoft technologies like ASP, then .NET. In 2008 I released Sueetie, an Online Community Platform built in .NET. In late 2012 I returned to my Linux roots and locked in on Java development. Much of my work is available on GitHub.