Starting Point
Building Customer Opportunity through Hidden Demand

Six years ago, Simon Rothman was idly searching eBay for a model Ferrari when he discovered two genuine Ferraris in the auction site’s toy collectibles section. Rothman, who also happened to work in business development at eBay, dug a little deeper and found 200 more listings for used automobiles – all located under model cars. The discovery kick-started eBay into monitoring the number of cars for sale and later that year they created a specific category for used automobiles. The following year eBay Motors was developed as a separate business unit. Today car sales represent roughly 30 percent of revenues generated through eBay.

Companies can be oblivious to consumer opportunity and occasionally are the last to notice a trend- especially when it challenges conventional thinking. “Invention is a side effect [in corporations], not the focus,” Nathan Myhrvold recently said of his former employer. “Most large organizations have a mission, and invention often takes you in another direction. When it comes to mission versus invention at most companies, mission wins.” Myhrvold was Chief Technology Officer at Microsoft Corporation.

Myhrvold, now principal at Bellevue, WA-based Invention Science, was taking specifically about product development, but he also believes innovation is sacrificed to corporate methods. Myhrvold says corporations are uninterested in pursuing projects beyond their core business and that they discourage innovation and efforts to isolate new problems and generate out-of-the-box solutions.

eBay may have discovered an important new product line through luck, but many companies don’t leave opportunity to chance. At Google, management encourages employees to devote 20 percent of their time to developing their own ideas. “Our employees are coming up with ideas anyway,” says Google cofounder Sergey Brin. “We just provide them with time to test whether those ideas work.”

Today, customers are increasingly collaborating with businesses to shape how ‘their’ products are created and sold and the line between the two is increasingly blurring. In a world where market conditions can change in less time than it takes to write a new strategic plan, a firm’s ability to recognize and quickly react to market forces is crucial. Many successful New Economy firms have organized themselves to take advantage of these rapid changes. They are innovative, nimble and flexible – just like the customer – and their structure often mimics the connected, but disparate nature of the Internet. Is corporate organization the key to success? Has a new breed of customer really arrived? Are traditional marketing and sales dead? What are the questions that would take this further?