NBC Universal and News Corp. this week formally launched their new joint venture Hulu.com, an online video service. Scott Anthony, president of innovation consulting and investing company Innosight, comments on a Harvard Business School blog about how two incumbent (i.e. traditional) media companies were able to “use the power of disruptive innovation to their advantage.”
He writes:
Amos Tuck Business Professor (and Innosight Senior Fellow) Vijay Govindarajan and Katzenbach Partners Senior Fellow Chris Trimble have a useful framework to describe how companies have to master what they call “strategic innovation.” Companies need to selectively “borrow” from the core business while “forgetting” old orthodoxies that might inhibit success and “learning” completely new ways to approach critical problems.
Hulu appears to have done a good job following this approach. The company has borrowed content, forgotten the way a television company would deliver that content, and learned how to emphasize simplicity.
Innovative ideas aren’t enough to fuel breakthrough growth in a new business. To thrive, new ventures must surmount three challenges:
· Forget some of what has made your core business successful—such as which skills to acquire and which customers to serve.
· Borrow only those assets from your core business—brands, sales relationships, manufacturing capacity—that provide a distinct competitive advantage.
· Learn quickly. The faster you resolve your venture’s inevitable unknowns, the sooner you’ll zero in on a winning business model.
Their perspectives validate perspectives from many of the commentators on this blog – newspapers have to forget current business models, find a way to leverage their core competencies and assets (connection to the community, content development and aggregation skills, significant sales forces, etc.) and create new, potentially disruptive ways to package, distribute and monetize their products.
That might include embracing content from sources other than our own newsrooms, re-thinking where “news” fits in a new product mix, distribution of content beyond our branded borders and expanding our revenue streams beyond traditional advertising functions.
