Book Review: Market Rebels: How Activists Make or Break Radical Innovations
By: Hayagreeva Rao, Princeton, NJ : Princeton University Press , 2009 . 205 + xii pages. Review by: George Castellion
Product managers and developers of an innovative product often treat diffusion of the new product into the target market as comparable to an epidemic by contagious contact with an early adopter. Hayagreeva Rao, in this clearly written and well-researched book, draws attention to the difference between diffusion by simple contagion for incremental innovations and diffusion by complex contagion for radical innovations.
For incremental innovations, the costs of adoption are low. Here diffusion by simple contagion helps spread adoption of the new product. Through multiple exposures in the target market by an early adopter, simple contagion occurs. For radical innovations, the costs of adoption are high because early adopters must overturn fixed habits and rules. Here diffusion by complex contagion through exposure to multiple early adopters helps spread adoption of the product.
Market rebels play a crucial role in complex contagion. The author describes the market rebels' role as explaining a hot cause and creating and mobilizing a community of members committed to the cause. In the first chapter, “From the Invisible Hand to Joined Hands,” he cites the Homebrew Computer Club's decisive role in the 1970s in waking up IBM and other manufacturers and setting up the market for personal computers.
The second chapter, “‘You Can't Get People to Sit on an Explosion!’ The Cultural Acceptance of the Car in America,” shows how automobile clubs, not Henry Ford, transformed cars from a devilish contraption into a cultural need. This case provides clues to the failure of the Segway, another transport innovation. The third chapter shows how a hot cause—tasteless beer—led to the microbrewing rebellion and establishment of a successful new niche in the mature market of industrial beer.
Chapter 4 examines the markets for creative arts where the work of the performer is an end in itself. The author describes how the radical nouvelle cuisine movement, powered by a hot cause—reaction against the rigid orthodoxy of classical cuisine—changed an industry. The free-music movement with the hot cause of peer-to-peer sharing of digital files shook up the music and video industries and created scores of new products.
The fifth chapter moves away from new product innovation examples to discuss how shareholder activism creates complex contagion in the struggle between management and the small shareholders. The next two chapters give examples of how complex contagion by consumer activists thwarts radical innovation in delaying commercializing of patents or through antichain store laws seeking to protect small businesses.
In the final chapter, “From Exit to Voice: Advice for Activists,” Rao gives advice for managers who wish to start complex contagion for a new product. To change a market's ingrained beliefs or behaviors, he challenges these managers to stop thinking like bureaucrats and to start thinking like insurgents. In this engaging book he provides wise counsel for managers who wish to secure rapid adoption of new products in markets shaped by emerging social movements.
Released: October 4, 2013, 9:53 am
| Updated: November 20, 2013, 10:43 am