radical Insights.

Weekly Research and Commentary on the Future of Business and Technology.

A Deep Dive Into State Changes.

May 16, 2023

As someone who has been around us and our thinking, you certainly have heard us talk about State Changes – our model to make sense of disruptive change. We write extensively about State Changes and the three-factor-deep dive in our book Disrupt Disruption.

Recently I was asked to explain in more detail not just what leads to a State Change and how to navigate them best, but also what happens within a given State Change.

It’s useful to borrow an often discussed and still largely misunderstood example: Music. We all know the story of the music industry going from analog (mostly vinyl and cassette tapes) to digital (CDs and other, less successful formats such as MiniDisc) and, of course, MP3s – and with that, the shift from owning to “renting” (aka streaming).

On a different level, the history of music consumption also provides us an insight into what goes on within State Changes. The first phase of a state change can be described as the “copy & adapt” approach: We put the old stuff into the new thing. We rip our CDs and put them on our iPods. An iPod looks, feels, and works like a Walkman on steroids. We still listen to our CD collection. Don’t forget that Apple ran campaigns when the iPod was released with the slogan “Rip, Mix, Burn.

Then comes the second phase, where we create the first truly native applications of a technology. They tend to look like toys and don’t really work all that well. MP3s are digital files, which, as it turns out, are rather easy to share – so share we do, and Napster provides a glimpse of what is possible. It’s messy, somewhat complicated, takes effort and time, and – not to forget – is illegal.

But then, as technologies and our understanding of them matures, they grow up to be something that is obviously better than the legacy technology (and all the iterations which came before). Once Spotify came along, it was game over. Gradually, then suddenly.

This brings us full circle to our State Change model and it’s connection to our work on Weak Signals – the crappy, buggy, toy-like but, at the same time, first uses of a new technology in its native environment, are the signals which indicate an upcoming State Change. Learn to spot those, and you will surf the waves of the future. (via Pascal)