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Hence, the innovator must build flexibility into its plans. Networked markets allow for the rapid diffusion of news, ideas, and, in theory, innovations. As more content became available in Acrobat format, more readers were motivated to download the program. Camera makers like Nikon and Minolta, as well as Kodak itself—though on the defensive—wanted to play an integral part in the shift from film photography to digital photography. Executive Summary Reprint.

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Each of the challengers had its own reasons for supporting digital photography. A bank, for example, cannot shift to a faster transaction-processing system if the change will affect how it communicates with other banks. Internet-based upstarts will try to ensure that consumers can freely exchange digital movie files, as Napster and others did with music files. Companies can do that by mentally playing out their strategies to all the possible endgames that can result because of different reactions by the other players. Meanwhile, Palm licensed its operating software to several companies, which created applications for the handheld device. Other companies must come up with ways to compress video into digital files that can be quickly and easily transmitted. RIM established partnerships with power players in both the service and manufacturing groups.

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Other companies must come up with ways to compress video into digital files that can be quickly and easily transmitted. Regulators will be concerned about the antitrust implications of the consortium the studios have formed. Several banks have to change their systems around the same time for the innovation to gain acceptance. Through these complementary relationships with the power players, RIM sought to carve out a path to the wider market.

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Description: And by working back from an endgame, they can change markets from foes to allies. Most executives focus on changing the behavior of only the early adopters and then crossing over to mainstream consumers. Executive Summary Reprint. The innovator bases every potential endgame on its expectations about events that will happen or on the behavior of other players, which creates uncertainty. A version of this article appeared in the March issue of Harvard Business Review. To ensure the adoption of a new product, the innovator must analyze the causes of the existing equilibrium and carefully deconstruct it. Innovations try to change the status quo, which is why markets resist them. This will give you immediate access to many other players in the network. In a networked market, each participant will switch to a new product only when it believes others will do so, too.
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