The Bowling Alley

I’ve owed this blog post to one of my twitter followers for a long time, so finally.

The bowling alley is a place on Geoffrey Moore’s Technology Adoption Lifecycle (TALC). I remember it as the first or second of his books on the topic that I read. The other one was “Inside the Tornado.” The bowling alley book is apparently out of print. I may be totally hallucinating, but I think I had it physically in my hands. I read those two before I ever read “Crossing the Chasm.” I read a lot of the same stuff over and over again from one book to the next, but Moore follows Tom Peter’s practice of giving away your methodology while constructing a new one. After the dot bust, Moore moved into the more orthodox regions of standard management practice–stuff startups can’t do, or at least startups that are fostering the adoption of a discontinuous innovation–something the internet is not today. The internet is a well adopted technology sitting in the late main street and later phases of the TALC. That the internet still fits into the TALC along with smart phones and the cloud tells us that the TALC is still relevant. Even if nobody pays attention to it these days.

One thing we hear is how risky innovation is, particularly discontinuous innovation, the kind of innovation that creates new wealth, new categories, and new companies. The bowling ally is a risk reduction mechanism. Risk be damned. Yes, if you do the orthodox pro formas and business plans, you’re boat gets sunk. The risk manifests itself. Management practice inserted that risk. Thinking economies of scale inserted that risk. Stage gating on a guess, or gut inserted that risk. Well, stop it. We can mitigate our risks via the bowling alley.

Moore’s bowling alley starts with the early adopter. That early adopter runs a business in a particular vertical. That early adopter runs the whole business, so you can span the enterprise, or focus on a few business or functional units. You don’t want to do anything horizontal for the early adopters, since you will be selling his application into his vertical. The early adopter will pay you to build his product visualization using your technology. You won’t need VC money yet. You could potentially bootstrap.

Given you know the vertical you will eventually enter, stage gate the early adopter engagement on that vertical. Is there enough seats and dollars in the vertical? Are you providing real competitive advantage to the eventual economic buyers in the vertical? Is there a real market, or is the use of the application driven by laws requiring use of the application, or reporting? Be careful here. Is there enough IT horizontal seats in the vertical? You’ll need those IT people, because the very last thing you do in the bowling ally is enter the tornado where you are selling to the IT horizontal. You get them on board during the vertical. Now, is too early.

Moore suggested engaging the technical enthusiasts in the vertical you are entering, as they might surface an early adopter willing to use your technology. In the figure below, I’ve color coded the bowling ally. I omitted the relevant technical enthusiasts. I’m using a overhead looking down view of the TALC. This will enable us to see adoption and sales of our products as vectors, and in the bowling alley in particular, a collection of Poisson games, games or unknown populations. Moore uses a normal, but after seeing a visualization of startup financial data, I’ve seen it as a Poisson distribution tending to a normal. This was irrespective of the bowling alley.

Research

 

 

 

 

 

 

You don’t see companies going through the bowling alley. I interviewed at one, the one that created the idea of demand pricing. The airline industry was their first client, their first lane in their bowling alley. They had other clients as well. Yes, companies do this. They do it to productize and drive the adoption of their discontinuous technology. You wouldn’t do this for continuous innovation/technology. You do see companies getting stuck in a highly profitable vertical. PeopleSoft is one example.

Doing the bowling alley is a slow process. You want to do eight custom development engagements for early adopters. To keep your intellectual property, you’ll need to give the early adopter something. Moore talked about a two year period of exclusion. That’s two years after delivery where you don’t sell the application. The early adopter wanted a competitive advantage, and gets it during those first two years. All is not lost, since you can have a very broad scope, deliver functionality inductively, deliver functionality as minimal marketable functionality, and engage in management consulting to help the client maximize their competitive advantage.  You’ll have plenty of time with the earlier lanes of your bowling alley. Later, you won’t.

In the next figure, I’ve illustrated the bibliographic maturity process as feeding the technical enthusiasts, some of whom may advocate attractive technologies to their business unit executives.  Again, not to IT. IT will not buy never adopted before technologies. When productized, business unit executives do buy applications that do what they need even if the technology is discontinuous. Of course, these executives are the least risk adverse executives around.

Inbound Idea

Notice that the outer edge of the technical enthusiast phase is gray to indicate that this edge is porous. The outer most red segment represents the technical enthusiasts that can advocate. The inner segment that is not red is the tornado and IT horizontal. The bibliographic maturity process is shown to the left. Since the 60s, we have allocated basic research to universities. Basic research is the kind that breaches physical constraints that are at the core of discontinuous innovation. Ideas move via tennis shoes and show up at the perimeter of a firm where they are subsequently brought in house and commercialized.

When stage gating, you should also consider the spread of your early adopter engagements across the industrial classification scheme that economists use. Moore suggested eight early adopter engagements each in a different industry. Scattering these engagements across the classification scheme enables you to move up and down the vertical with minimal effort, and it enables you to sense economic events via the normal operation of these eight businesses. Different industries propagate economic events at different rates. While one of your lanes closer to the event slows down, all of your lanes will not slow down at the same time.

Industrial Classification Scheme

The figure shows both the movement and sensor net effects of having a collection of well placed lanes.

Eight engagements are taken on serially, one after another. Doing more than one at a time requires us to grow our headcount and capabilities. In the next figure, I start out with one engagement or lane in the first year, doubling the number of engagements in the second year, and doubling the engagements again in the third year. Since my aim is to continuously do discontinuous innovation, I transition to another discontinuous technology once my eight engagements for a given technology are underway. The figure shows subsequent technologies. The figure reflects a very clean process where reality is messy.

Eight Lanes

Now, imagine wrapping the above figure around the radius of the tornado and IT horizontal. Each of the products would be represented by a vector extending from the technical enthusiasts  and ending at the tornado. We ended up with the following figure.

Eight Lanes on TALC

In this figure the products are scattered around the industrial classification scheme. Thick red radial lines represent ongoing product development. The brown areas show how the radials get shorter and shorter as we approach the last engagement or lane in our bowling ally for a given technology. The last engagement will not be waiting around in its vertical. This decreasing engagement window happens because we will combine all our products into a single application that brings all the users with it as it enters into the IT horizontal. The blue areas illustrate where we begin to focus on the IT horizontal. The red radials represent our vectors and the Poisson games associated with them.

It’s messy. There is a lot of work involved in getting across the bowling alley quickly. The goals change. Ultimately, the bowling alley sets you up to win your tornado competition and win your market leader designation, and market power market allocation that grants you a near monopoly for years to come.

Don’t listen to the siren’s call of risk, risk, risk. Mitigate those risks by taking the time required, and putting in the effort to cross the bowling alley.

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