The End of Mass Innovation

Marketing guru Seth Godin, in his book We are All Weird, argues that the age of mass markets is over. Furthermore, the alternative to mass is not niche, but weird.

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Marketing guru Seth Godin, in his new book We are All Weird, argues that the age of “mass markets” is over.  Furthermore, the alternative to mass is not niche, but weird – small groups with unusual taste.

As a baby boomer, I grew up in mass markets. At night, I could secretly watch our neighbor’s TV through the hall window. With only 3 TV channels to choose from, odds were high that the audio from the channel my parents were watching in our living room would match. Today, forget it. The Big Three market share’s fallen from 90% to under 30%.

We rejoiced over Howard Johnson, which offered my family the security of finding a comfortable bed while travelling in a new state. Pittsburgh had A&P grocery stores, so you went to A&P. Cereal choices were few. (Today, according to Godin, the cereal shelf alone is larger than the entire packaged good section of the grocery store in my youth.)

Media, marketing and companies all existed to push us to mass. That was where the money was. Serving a large uniform market created leverage to lower marginal costs, which in turn increased profits. And mass was where most people were in terms of their tastes (or so we thought).

In Godin’s world, the tails of the normal distribution are getting fatter and fatter as the center – where mass market solutions thrive – continue to shrink.

Why are we living in a world of fatter tails?

  1. With more wealth, we all – across the globe – have more choice and are willing to act on that choice. The world is getting richer at an amazing speed, creating opportunities for differentiated tastes and choices.
  2. The Internet, new 3-D printing, and other new technologies amplify our individual creativity. Anyone can reach anyone. We can all be producers meeting the unmet needs we discover – our own and other’s. We don’t have to rely on the “producers for the masses” to get our needs met and, with more choice, mass solutions are increasingly likely to disappoint us.
  3. With the Internet, marketing can be far more efficient at reaching individuals. And because the Internet has removed “place” as a requirement for commerce, you can seek out individuals anywhere and anytime.
  4. Finally, tribes (the subject of Godin’s earlier book) are more connected. The Internet amplifies what tribes are all about and pushes tribes to take their shared interests as far as they can go. I recently read about a “tribe” that convenes from across the globe to wear ancient armor to re-enact middle age warfare. A market exists to supply this community with weapons and armor. Amazing.

While there are, according to Godin, nostalgic moments when we feel we are all one tribe (e.g., Super Bowl Sunday), what we yearn for most is to belong—but not to the über tribe. “Our own little circle is what we really want,” Godin states.

Implications for innovation

So what does this mean for innovation? Here were my reflections after reading Godin’s book.

  • Watch out for the cultural bias we all have to think that mass is best.
  • Explore markets through the lens of a kaleidoscope versus a macro lens. Focus on differences rather than spending your time figuring out the “mass market” solution.  Godin gets it right when he says, “There is no us. No mass. No center…. Just tribes …in search of those who would join them or amplify them or, yes, sell to them. This is not utopia. But it is our future.”
  • Define your business models around smaller and smaller groups of people. Achieve efficiency through the use of shared platforms.
  • Offer solutions that can be personalized. Real personalization (how I configure my cell-phone functionality using Apps). Not faux personalization (the color of a Dell computer case).
  • Rethink your metrics. We have few ways to predict the advantages of duplication and focusing on smaller groups.  So many companies consolidated units in the 2008 recession to “save money.” Perhaps revenue is not growing because, in the scaling, we no longer look for unique, unmet needs.
  • Rethink the structure of your company and why it should exist as a company. The company of tomorrow may be a huge number of small communities each serving a widely divergent set of tribes but sharing a common purpose and key process, knowledge and skill platforms.
  • Personalize communication – delivered to the individual when and where he or she wants it. This is an awesome and exciting challenge for media and marketing.

There will be large markets in our future. But they will emerge more and more from consumer affinities, not producer financial metrics.

Weird. And refreshing.

MIT-trained economist Kay Plantes is a strategy consultant and author of Beyond Price: Differentiate Your Company in Ways that Really Matter (Greenleaf Book Group, 2009). She writes a blog on business model innovation at http://www.plantescompany.com/blog.

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