More Than a Product: Innovation for a New Era

Evolving Products to Platforms in a Changing World

Editors Note

High Tech CompaniesArena conducted interviews with the leaders of six cutting-edge high-tech and med-tech companies earlier this year to capture their insights on the changing face of product innovation. Given the unprecedented disruption currently confronting all companies, we revisited this report in whole to verify that its conclusions have kept their relevance in today’s climate.

The conclusions are more relevant than ever. You’ll learn how these innovators were already implementing strategies that tackle some of the most significant business challenges that product managers face today—solving complex and urgent needs, preparing for supply chain shocks, and collaborating across distributed teams and partners.

We believe you’ll gain key insights from their approaches and can apply them to your organization’s methods of product innovation in this new era.

Executive Summary

R TuckerIf you are in charge of creating new products for your company, you already know that a confluence of forces is challenging long-held assumptions about the way that products are devised, developed, and delivered to market.

Advances in digitalization, artificial intelligence, and the Internet of Things (IoT) are connecting products to people in ways never before possible. Apps, sensors, and social platforms are integrating products and casting off terabytes of data in the process. Add the movement toward virtual and contract manufacturing and globalized, interwoven supply chains—with both the benefits and risks they involve—and you begin to realize the breadth of changes taking place. Mix in evolving customer demands, burgeoning regulatory and compliance requirements, and the unpredictable consequences of political, environmental, or health crises, and the result is a complexity accelerating at the rate of Moore’s Law.

To be sure, these combined forces of change continue to make the process of product development increasingly challenging. At the same time, however, they create the conditions for incredible growth and opportunity. For those who understand how to navigate this shifting terrain, the future holds a great deal of promise.

This report explores that terrain. It is based on a series of wide-ranging interviews with senior leadership at six organizations on the cutting edge in healthcare, consumer electronics, and autonomous vehicle technologies. Each organization was selected for its bellwether qualities.

Some of these firms are in the startup stage. Others are long established. What they have in common is that they are not just navigating this new terrain, they are mapping it and shaping it to their advantage. This report reveals common themes in these companies’ approaches. And while further research is surely warranted, we believe that these commonalities in approach clearly indicate how new products will be developed into the next decade.

Our interviews revealed four key principles that guide companies on the cutting edge of innovation:

1. Breakthrough innovation results when the goal is solving a complex problem in urgent need of a solution.

Breakthrough innovation results when the goal is solving a complex problemTo truly stand out, an innovative product needs to address a complex problem, particularly where existing solutions have come up short. Sometimes solving such problems saves lives. Sometimes doing so simply makes life more sustainable and enjoyable.

For one of the senior leaders of Lumicell, a medical device innovator, the goal was literally saving lives. Founding President and Chief Scientific Officer W. David Lee had lost his wife to cancer. She had an operation to treat her breast cancer, and Lee learned that they did not have imaging to guide the resection and find all of the cancer. Lee and his partners at Lumicell, based in Newton, Mass., went to work.

They created a handheld imaging system that allows surgeons to literally see any unremoved cancer cells during an operation.

In this way, thanks to Lee’s innovative vision, the outcomes of breast cancer surgery are being improved, and others are being spared the loss of a loved one.

2. The most innovative products create a connected customer experience.

The most innovative productsToday’s whiz-bang new product is tomorrow’s ho-hum commodity. Product lifecycles are now measured in dog years as me-too manufacturers neutralize new features as fast as they appear. One way to stay ahead is to turn the traditional “product” into a connected customer experience. Peloton redefined the experience of using an exercise bike, connecting in-home users to live classes and streaming shared fitness experiences to their growing legion of fans. In an era that’s seeing social distancing become a new norm, Peleton’s ability to create a virtual community is particularly relevant.

Spinn, incorporated in 2015 and headquartered in San Francisco, is creating a similar networked experience for coffee lovers. In 2014, Spinn captured media attention with an entirely new approach to making coffee based on a patented centrifugal brewing system. The company’s sleek machines are voice-enabled.

Users can “speak” to the coffee maker and interact with it remotely via an app.

But as described in this report, these innovations were only the beginning. Spinn really gained traction when it began thinking beyond the product—seeking ways to connect to the experience of great coffee and becoming an ongoing part of their customers’ lives. As one example of creating networked experiences, Spinn’s idea factory developed a community of boutique coffee roasters in various parts of the world from which users can reorder their java at the touch of a button. Orders arrive with a QR code telling the machine specifically how those beans should be brewed.

Innovative products reduce complexity for the customer3. Innovative products reduce complexity for the customer.

As we discovered in these interviews, creating a simple, elegant solution that allows customers to address real challenges requires overcoming increasing levels of complexity. As we also discovered, that simplicity is often the key to innovation and something customers tend to value the most.

Kymeta, based in Redmond, Wash., provides an example. The firm makes flat-panel satellite-tracking antennas. First responders and the military use these antennas to create broadband connectivity in remote locations. One of their many differentiating features is that they can be attached to vehicles of all sorts—cars, planes, ships—and used while the vehicle is in motion. (The typical satellite antenna must remain stationary to receive signals.)

Before Kymeta’s breakthrough design, installing satellite antennas with similar functionality was expensive, cumbersome, and timeconsuming.

An engineer had to be on site to properly align the equipment with the satellite’s sending signals. Kymeta decided to simplify the process.

“We wanted an easier way for buyers to use the service,” said Neville Meijers, Kymeta’s Chief Product and Marketing Officer. “So we developed an end-to-end service that allows customers who aren’t familiar with satellites to become connected.”

. Innovation depends on collaboration and cooperation

4. Innovation depends on collaboration and cooperation between the organization, the supply chain, and the customer base.

Collaboration and cooperation between the organization, the supply chain, and the customer baseAs we were winding up our interview with Nate Ramanathan, Vice President of Operations for autonomous vehicle pioneer AEye, Nate made clear why we had trouble scheduling an interview with him. Last year alone, he flew over 289,000 miles!

Ramanathan, we discovered, is much more than the traditional operations executive. He’s chief orchestrator and evangelist of a vast network of engineers, suppliers, partners, and customers all collaborating to bring highly complex products to market. Except the market doesn’t yet exist and the future is still being defined.

AEye is one of 80 companies in the Light Detection and Ranging (LiDAR) market, the du jour autonomous guidance system that detects objects and maps their distances. AEye’s breakthrough product is called iDAR.

Unlike the competition, it allows self-driving vehicles to see “only what matters.”

Impressive as the technology is, AEye’s other breakthrough is one its customers rarely get to see: the company’s innovative system of global orchestration that spreads AEye’s cultural values and sense of mission across platforms, across P&Ls, and across continents. As the leader of this complex set of actions, Ramanathan says it’s essential to build and reinforce trust. Trust is established with good communication, supported by a connective software platform. With that in place, AEye can integrate and anticipate ever-changing customer requirements.

As the autonomous vehicle industry evolves, some players are already dropping out. Others like AEye are moving forward and inventing the future—not just in terms of deliverable products, but in how they collaborate with multiple partners and interact with customer ecosystems. “We take customer feedback seriously,” Ramanathan told us. “We are learning every day.”

Summing Up

We wish to thank the many executives who took time out of their busy schedules to allow us to ask them questions and probe the secrets of their success. We encourage you to read their stories, find out what they do differently or better than other companies, and apply these lessons to your own organization. As we learned from speaking with these industry leaders, innovation isn’t simply the result of one moment of brilliant insight. It results from building a culture, an infrastructure, and a connected experience to bring that insight to life and continuously improve on it.