It's easy to misunderstand White Space. About twenty years ago Apple launched the Newton. The company sold about 375,000 of the first commercial PDAs, but Apple's leadership thought the market wasn't really there – and decided instead to focus on growing Mac sales. Obviously, as Palm and other PDA makers demonstrated, there was a tremendous market for PDAs. Apple misread the feedback from White Space.
Look now at the recent iPad launch. Silicon Alley Insider headlined "Now That They've Seen Apple's iPad, Most People Don't Want One." The headline keys on the fact that after the launch the number of people who said they were not interested to buy doubled (26% to 52%). Wrong fact to grab onto.
Instead, look at the fact that the number who said they would buy one tripled, from 3% to 9%. This is incredible, and should excite Apple's management as well as employees, suppliers and shareholders.
Most people will see a new, innovative product and say "why would I want that? I already have this other thing and it works great." And that is what marketers should expect. Most people are just trying to Defend & Extend what they regularly do, and thus all the want is a product that helps them do their thing a little easier, faster, better and cheaper. They want minor improvements – variations and derivatives of what they already have. Improvements that are immediate, without them doing anything new or different.
All new deeply innovative products start with customers who are under-served or unserved. And this is why it is so important they be launched in White Space. White Space teams aren't intended to develop the big, mass market of known customers looking for something new. White Space is about doing new things that bring in new customers, give new solutions that attract real growth. And White Space teams have to learn how the market is evolving, how they fit into the market shift and how their solution will advance the market in order to sell more.
For the iPad, the 3% to 9% shift in likely buyers is huge because it shows that the iPad is an offering that appeals to people who are not today well served by their existing PC, laptop, netbook, mobile phone, kindle or mix of these solutions. 9% of respondents are saying that they see the iPad and they see a solution for what they want to get done. And if 9% of potential buyers see this option, that is HUGE. By White Space standards, often there are only .5% or 1% or 2% of people who initially see how the new product fulfills their under-served needs.
Set expectations right for White Space. White Space is not for launching variation 4 of an existing product – targeted at existing customers. That's what the marketing and sales department can do fine, thank you very much. White Space is the team that finds the 3% (or in Apple's case 9%) of users that see value in this solution, then works with them to implement the product/solution in order to make sure it fulfills the market need and is priced to sell effectively while providing a profit to the company.
Apple understands this, you can be assured. Look at how successfully the Apple White Space teams found the underserved users that jumped all over the iPod and iTunes, the iTouch and then the iPhone. They got the product positioned and selling in a hurry. And now that Apple has that skill, the company is going to apply it to the iPad. If you understand this chart correctly, you understand that it bodes very, very good things for Apple.
And it tells you the importance of having White Space teams, setting their expectations correctly, and managing them for the kind of results that can turn your organization into the next Apple. It took Apple 10 years to reach this skill level. It did not happen overnight. Or with one product introduction. And it will take your organization a few years to build this skill. So, what are you waiting on?
Adam, thanks for hitting the mark here. Many people know me as an Apple aficionado (I know, who isn’t these days, but I launched my first business in 1986 on a Mac Plus and never looked back) and said that they were unimpressed with the iPad’s appearance. “It looks like a big iPhone!” I agree that its appearance doesn’t look like much. But I recommend to people to withhold judgment until they use one. Apple’s genius comes from understanding experience, much of which is software-driven. Software is all about tipping points: if the iPad makes it THAT much easier to read books and watch movies because Apple’s nav is 15% more intuitive (that’s conservative), a huge new market of grandparents will be discovered. Etc. I work with computers and other people who use computers, phones, etc. Apple’s impose MUCH less friction of interface on users. Thanks again for bringing up the salient point of white space and distinguishing it from daily business. BTW, you might also like this Apple-initiated disruption: http://gizmodo.com/5465323/why-and-how-apple-killed-the-999-ebook?skyline=true&s=i
Having led a project to try to bring Newton’s into my then employer’s management ranks, I’ll tell you with confidence what the problem was with the Newton: Apple’s corporate arrogance. It took several forms:
* Its customers tried to tell it what was wrong with the product, and Apple’s response was, “You’re wrong.”
* Apple had no interest in how the Newton would fit into a real human being’s actual workday. Its most glaring deficiency was its inability to sync with various corporate calendaring/contact management systems. This was Palm’s most important feature, and was the reason millions of people bought Palm PDAs while ignoring the Newton.
* Pricing: As was usual with Apple products, the Newton was priced to not sell: $500 or more, compared to maybe $125 for Palm’s devices.
Bottom line: Strategy matters, but the devil is always in the details, not the big picture.
My biggest concern with respect to the iPad is that there’s nothing innovative about it. Instead of engineering an interesting device from the ground up, Apple took the lazy way out and built a big iTouch.