L7 Flashcards
Diffusion =
Diffusion =
Process by which an innovation is communicated through certain channels over time among the members of a social system.
Innovation adoption
Implications:
- People gain something by adopting an innovation, but they will also need to give up/ loose something
- What they give up has a bigger weight then what they gain
- Innovations need to deliver high gains in order to be adopted
Endowment Effect =
Endowment Effect = people ask for 2-4 times more for giving up what they have than for obtaining these items
–> This means for innovation, people have to gain something from adopting, as they also loose something
Innovation
Characteristics:
- Relative Advantage = Degree to which the innovation is perceived to be superior to current practice
- Complexity = degree to which the innovation is difficult to use or understand
- Trialability = degree to which the innovation can be experienced on a limited basis
- Observability = degree to which the results of an innovation are visable to potential adopters
- Compatibility = perceived consistency with socio-cultural values, previous ideas, and; or perceived needs
- Perceived risk = the degree to which the innovation is expected to perform inadequately or involves e.g., physical risk
Data Driven Operation
Identification of new opportunities from analyzing significant values of data
* Build on user interactions with a digital innovation (user profiling)
* Can be used to continously monitor user behavior (fine-grained monitoring)
* Source to learn about new opportunities and inform features that foster adoption (decision hedging)
* Example: Netflix
Swift Transformation =
Swift Transformation = Deploying core technology for a new purpose
- Leverage the versatility of digital resources: digital technology is agnostic to specific use cases and industries.
- Firms can quickly enter new industries, or redefine who they are and what they do
- Example: Glitch (gaming) into Slack (enterprise collaboration tool)
Envelopment =
Envelopment
= Process through which platform owners enter a new market by coupling their own functionality with the target’s
- Leverages overlap in users and capitalizes on network effects
- Incumbents thereby can no longer access users as their first point of contact will be the platform owner
- A new path for entering a new market that differs from schumpeterian innovation
- Example: MS Teams vs Slack
Firms can act very quickly due to ..
Firms can act very quickly due to … modularity of digital innovations
The Adoption Life Cycle
Categories
1) Innovators
2) Early Adopters
3) Early Majority
4) Late Majority
5) Laggards
The Innovation Mechanism =
The Innovation Mechanism =
A self-reinforcing process by which new products and services are created as infrastructure malleablity spawns recombination of resources
Digital Infrastructure
->
Technical malleability
->
Recombination
->
New Services
->
Digital Infrastructure
The Adoption Mechanism =
The Adoption Mechanism =
A self-reinforcing process by which more users adopt the infrastructure as more resources invested increase the usefulness of the infrastructure
Digital Infrastructure
->
More services offered
->
More users adopt
->
More resources invested
->
Digital Infrastructure
The Scaling Mechanism =
The Scaling Mechanism =
A self-reinforcing process by which an infrastructure expands its reach as it attracts new partners by offering incentives for collaboration
Digital Infrastructure
->
Partners attracted
->
Partner solutions added
->
Reach expanded
->
Digital Infrastructure
SCALING
3 Mechanisms:
- Data-Driven Operations.
- Instant Release
- Swift Transformation
- Data-Driven Operations. = depicting the process by which digital ventures frame, hedge, and monitor innovation opportuities and risks through analyzing significant volumes of data.
- 1) user profiling = utilization of user data to identify and explore uncharted areas such as new user segments.
Helps identify innovation opportunities that can be progressed and subsequently launched. - 2) decision hedging, = activities by which digital ventures use established and novel data types for assessing the risk of its innovation.
- 3) fine-grained monitoring of the user base data including growth/decline rates, usage patterns, new applications, cash flow, and systems performance
- Instant Release = the ability by which digital ventures minimizes the time gap between service idea and deployment by concurrently running user-responsive service trialing and modification
- 1) Launching = depicts the activities that digital ventures undertake to consolidate and channel internal resources and prioritize data-driven operations toward fueling the launch of innovations.
- 2) Concurrent Trialing. = involves activities of testing different services and service versions in parallel to enable multidimensional user feedback.
- Based on the feedback, ongoing modifications of the innovations were expected and realized.
- 3) Reactive Modification,= involves the immediate changes undertaken by a digital venture to an established service in view of users’ reactions and feedback.
- Swift Transformation = the ability by which a digital technology is effortlessly contextualized to project new value-in-use and new venturing identity.
–> occurs less frequently then other two
Triggered only when a distinct effort to generate a new wave of rapid scaling of the user base is initiated by the digital venture.
- 1) First, supported through contextualizing core digital technology for a new business context
- 2) Projecting novel value-in-use, = how managers anticipate and manifest novel benefits of a digital innovation to attract and engage existing and new users.
- 3) (re)defining identity = represents digital ventures’ recurring definition of what they do and who they are.
Data-Driven Operations (1. Scaling) =
Data-Driven Operations. = depicting the process by which digital ventures frame, hedge, and monitor innovation opportuities and risks through analyzing significant volumes of data.
- 1) user profiling = utilization of user data to identify and explore uncharted areas such as new user segments.
Helps identify innovation opportunities that can be progressed and subsequently launched. - 2) decision hedging, = activities by which digital ventures use established and novel data types for assessing the risk of its innovation.
- 3) fine-grained monitoring of the user base data including growth/decline rates, usage patterns, new applications, cash flow, and systems performance
Instant Release (2. Scaling) =
Instant Release = the ability by which digital ventures minimizes the time gap between service idea and deployment by concurrently running user-responsive service trialing and modification
- 1) Launching = depicts the activities that digital ventures undertake to consolidate and channel internal resources and prioritize data-driven operations toward fueling the launch of innovations.
- 2) Concurrent Trialing. = involves activities of testing different services and service versions in parallel to enable multidimensional user feedback.
- Based on the feedback, ongoing modifications of the innovations were expected and realized.
- 3) Reactive Modification,= involves the immediate changes undertaken by a digital venture to an established service in view of users’ reactions and feedback.
