Entrepreneurs, Reverse Salients, and How to Find Them

Long ago I used to have a blog called Design Thinking Digest that has long been lost to the ages. I post some of my older writings that I still think have value here.

If I were writing this story today, I’d probably say the biggest thing entrepreneurs should be looking at is data that is locked up or unexploited; good experience is merely table stakes today.

Originally published on January 03, 2007.

Economic value is locked up in vulnerabilities that exist in all products and services. Find a way to release it, and you can have a powerful and profitable new business. Traditionally, the ways to master and control vulnerabilities took one of two paths: closed systems via Apple or Sony or open systems such as Linux and the World Wide Web. Which approach is better? Neither.

Understanding why and where value is hidden can help you understand why platform companies like Microsoft and Google are successful and how new technology APIs and designer and developer tools from a myriad of providers are game changers in software development.

In the winter edition of Strategy+Business (Disclosure: Microsoft sponsors this journal), a quarterly journal published by Booz Allen Hamilton, Nicholas Carr writes about the phenomenon of the reverse salient in The Weakest Link (registration required). Simply put, if you want to succeed in business, identifying a product’s vulnerabilities can point to new business opportunities and markets.

Carr defined the term ‘reverse salient’ as having its roots in the military where it referred to a section of an advancing military force that had fallen behind the rest of an attack. Typically, this section was referred to as the weakest point of the attack, a lagging element that could prevent the rest of the force from accomplishing its mission. Until a reverse salient could be corrected, the force’s progress stopped.

Carr illustrates this scenario in several fashions, such as how the invention of the rubber o-ring enabled innovation in commercial aviation that forced it into the mainstream — and how the dominant forces of the day missed the innovation. He also referenced how Westinghouse, by buying the patents to Nikola Tesla’s alternating current, could capitalize on the dominant standard for electricity over Thomas Edison’s (at the time) more prevalent standard of direct current. This was primarily because alternating current could be transmitted over much greater distances. Edison’s advances were revolutionary at the time, but that one reverse salient prevented his standard from succeeding.

Obvious current parallels can be seen with the advent of the iPod and the iTunes music service and their simplicity in facilitating the mainstream adoption of MP3 players. We’ve also seen reverse salients in software. In the case of Microsoft, there were some huge reverse salients that challenged the company. One was the advent of the Internet in the mid-nineties and the new relevance of a piece of software called the browser.

However, when addressing one reverse salient, many new ones often crop up. In the case of the internet, many of the solutions developed by Microsoft created new reverse salients around security. The ubiquity of Windows and the area of the surface that was vulnerable to these security threats evolved this reserve salient into the principal challenge that Microsoft focused most of its efforts and resources on in the early 2000s.

There are some challenges here in software that are specifically pertinent. One, how do you catch reserve salients (often the hardest part is realizing that you have one — case in point, look at what Tivo, Replay TV, and the current crop of digital video recorders have done to broadcast market share). Two, once found, how do you fix them, and three, how can you prevent or predict how new ones will impact you?

This is a constant battle that, in the realm of software, has been dealt with in two primary ways. One is with closed systems, such as tying an operating system or service to distinct hardware. The challenge with a closed system is that it’s hard to pull off; it requires visionary leadership, and there’s always the risk that a team will overlook or miss something. Would Apple really be able to succeed today without Steve Jobs’s singular and persistent vision? Would a company like Boeing be able to? BP Amoco?

Open systems rely on looking outside the walls of a specific group or enterprise. We see this most commonly in standards developed for the Web and via open-source software. We are already seeing a world where consumer-generated media and Grand Challenges are changing the way we solve problems. But open systems can commoditize the value of intellectual property and be challenging to monetize, they also often cater to the lowest common denominator (ie if every technology is exceptional then no technology is exceptional — apologies to Syndrome and The Incredibles). This scenario commonly plays out with consumer electronics and can lead to a stifling of or no innovation.

So, what are the next, best, most probable reverse salients you should be looking for if you create software? How should you address them?

In software, perhaps the most obvious and high-value reverse salient that can be addressed is to release economic value through a renewed and aggressive focus on user experience. In fact, Microsoft (one could argue belatedly) is staking its future on this with the new releases of Vista and Office, new user-experienced-focused APIs, designer tools, and workflow integration efforts between designers and developers.

One of the advantages that Microsoft has in this space is they aren’t focusing on solving these problems via the same models that have existed in the past (an evolution of design tools that has emerged from print and animation models).

But there’s still that question about openness versus being closed. How does a consumer or user of software or services get the best value, and does the creator of technology get the best economic return? Are they mutually exclusive? I think the answer to that question might be that you need to be both closed and open at the same time — in fact, I think this is more or less what Microsoft does, and it’s a key reason they are successful. They protect Their intellectual capital, but they care, feed, and maintain an ecosystem that can add economic value to our offerings beyond what they’ve ever been able to do on their own. This becomes a critical issue for all companies as they need to grow and maintain the value of intellectual capital but not diminish the choices or options of their customers. (A lesson that is admittedly hard to learn at times).

This challenge will play out over the next year as companies wrestle with making ubiquitous but less than optimal experiences for customers in different channels and those that take a multi-channel approach that will develop premium experiences in specific channels that can support and enable them in the best fashion for a targeted audience.

The bottom line on reverse salients? Perhaps the biggest one in software right now is how the lack of a coherent user experience is bottling up economic value. If you’re not thinking about the processes and tools that you are going to use in 2007 to unleash user experience in your software and services, it may already be too late.