The S-curve

Question 1

What is the S-curve?

Answer 1

An innovations life-cycle

Maps growth of revenue or performance against time and continued investment

Question 2

What happens early in the S-curve?

Answer 2

Low R&D productivity

Need to experiment

Lots of early failures

Building up knowledge about the area

Bringing together the “right” capabilities and knowledge

Question 3

What happens when “riding” up the S-curve?

Answer 3

Focusing on an overall “architecture”

Focusing on narrower and more well-defined technical challenges

Organizational commitment and incentives

Leveraging prior experience

Question 4

What happens when you hit the natural limits (top) of the S-curve?

Answer 4

Key physical limits determined by broad technical choices (e.g. speed of sound: analog vs digital)

The constraints result from key architectural choices

Question 5

How to use the S-curve? (which questions to ask)

Answer 5

What are the dimensions of performance in our industry?

Are there natural limits to performance improvement?

Where are our competitors on the S-Curve?

Which dimensions of performance are they working on?

What does the available data tell you about what stage the industry is at and how much further it can go?

How reliable are your estimates & what are the key assumptions that justify your opportunity definition?

Question 6

What are the issues with the S-curve?

Answer 6

• Progress as a result of the passage of time vs. progress as the result of returns to effort (We cannot know for sure that technology is the only reason)
• How to combine incremental vs. switching?
• Which parameter(s) shall I predict?
• What level of aggregation – firm or industry
• What level of analysis – component vs. system v. process
• Do all good things come to an end?
• The S curve is best viewed as a tool for triggering discussion & revealing assumptions, not as a “scientific reality”