From Convergence to Divergence to Disruption

By Rich Nutinsky

A look at the life cycle of buying and using criteria in technology markets

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I like to illustrate the concept of buying and using criteria like this: When my wife and I go shopping for cars, we tend to look at different things. I want to know about the features, the performance and what all the buttons do. She wants to understand about the costs, the maintenance and the insurance impact. Her criteria are about buying, while mine are purely using criteria. They are very different, but where they converge is the "sweet spot" where a car earns a second look.

The relationship between buying and using criteria is very interesting. And I've actually noticed a pattern in the technology arena that can be seen as either an opportunity or a threat. The criteria start out the same, then diverge as time goes on until ultimately you find yourself wondering how anyone can meet both sets–and then someone comes along and does just that by delivering a completely different solution. 

Let's look at this life cycle, using the computer as an example.

Two as one. In this stage, we have what many refer to as "technology-based sales." Our technology people sell to their technology people, our experts to their experts.

Early on in the computer marketplace, IBM's desktop computers were mainly for more technical use. It took an IT department to buy it, to set it up, to load DOS and to really get it to do anything. The buying criteria were driven by the using criteria—and so both were the same.

The sweet spot. As time moves on and the market matures, the needs of the buyer and the user communities start to diverge. Some criteria still overlap in the sweet spot, and those are the things that you really have to do well.

With the computer, new users arrived over time who wanted more business-oriented programs, while IT departments (who still did the buying) became focused on centralized data, security and anti-virus software. IBM, when it dominated the market through the mid '90s, played well to the sweet spot for both the corporate buyer and the business user.

Divergence. Next, you get these two groups of criteria: things that users care about that buyers don't, and things that buyers care about and users really don't. And the two groups no longer overlap.

The criteria completely diverged for computers when IT departments were no longer focused on their own usage, but on locking the systems down for other users with firewalls and Internet restrictions. At the same time, programs had evolved to where business users no longer needed daily IT support. And those users were pushing for more access and consumer-focused applications.

Disruption. In this stage, new technology emerges that meets both the buying and using criteria in a way that the market hadn't ever seen before.

In the computer world, this disruptor was the advent of fast, inexpensive personal computers like those from Dell. It was now easy for individuals to buy, use and maintain their own systems at home.

Opportunities in the Making

As this evolution happens, it affects the way you sell a product, who you are selling it to and how much credence and weight you have to put on the buying and using criteria. And it creates both an opportunity and a threat for your company.

Opportunities exist to introduce disruptive technology in markets where the two sets of criteria have diverged and existing players aren't in touch with users anymore. It's important to keep your eyes open for these opportunities, because for brand new technologies, you don't see requests for proposals (RFPs). You see people inviting in thought leaders and advanced companies to present their ideas. And then they debate internally to decide whether they're comfortable moving forward with it.

If you're the company that's been succeeding in the space, then that divergence actually is a threat. You want to watch for it, so you can block the opportunity this could mean for outside technologies.

This goes along with what we teach product managers: Instead of relying exclusively on RFPs and input from sales to tell you what people want, keep in touch with both buyers and users to be a more market-driven company. You want to be aware of whether you are early or late in the pattern and be proactive in recognizing these changes as they happen.

Having that market focus can help you clearly see when this separation of criteria is occurring, and you can better position your company to address it—no matter which side of the technology you're on.



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About the Authors

  • Rich Nutinsky

    Rich Nutinsky is an instructor at Pragmatic Marketing, with more than 20 years of experience in the software industry. He has launched several successful software products using the Pragmatic Marketing Framework. Prior to joining Pragmatic Marketing, Rich served in various product management positions for companies including Arasys Technologies, where he was vice president of product management and development. He has provided consulting services to market leaders such as Microsoft, AT&T, DuPont, NEC, GE and Siemens, working with senior-level executives to improve their product strategy, product management, and marketing processes. He may be reached at rnutinsky@pragmaticmarketing.com.




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