The logical limits of product innovation
“Innovation appears stalled in many industries because the product or service has reached its point of diminishing marginal returns for innovation. … We’ve perfected the brewing of beer. We’ve created thousands of types of beer – lager, stout, porter, hefeweizen (my favorite), bock, etc. Have we reached the point of diminishing returns for beer innovation? I think the signals are flashing “yes”. Here’s why.
Coors recently ran an ad that highlighted the beer can. The can had three significant attributes they wanted to call to attention. First, the mountains on the can change color when the beer is cold. Second, the can has a liner to keep the beer cold. Third, the can has a new pop-top to improve airflow and drinkability. All of these things may be labelled “innovation”, but they are innovation in packaging, in marketing and in information signalling, not beer innovation. …
Note that some of these “innovations” are a bit perverse. Many beer drinkers will tell you that beer shouldn’t be too cold, otherwise you lose the flavor. And does anyone need a more technical pop-top? Were there unacceptable incidents of beer spillage or individuals who failed to get the beer from can to mouth previously?
When product manufacturers start innovating the packaging, the information about the product, the channel or the business model, it’s a good signal that they’ve reached a diminishing return on innovation in the product itself, and only a significant disruption will spark new product innovation in the sector.
Innovation itself isn’t stalled, it’s simply on hold for the next disruptive evolutionary cycle. Innovation isn’t a smooth, continuous process but a spiky discontinuous process made up of long period of incremental innovation punctuated by short bursts of disruptive innovation.”