Informal groups of enthusiasts may be the key to what makes a new product the next big thing
Market Rebels:How Activists Make or BreakRadical InnovationsBy Hayagreeva RaoPrinceton; 205 pp.; $24.95
"You can't get people to sit on an explosion," remarked one Colonel Albert Pope, an early-1900s bicycle importer from Boston who strongly objected to the idea of automobiles powered by gasoline or steam. Until he founded a business making and selling cars, that is. So what changed his mind? And what convinced the public at large that such "devilish contraptions" could be a viable part of everyday life—rather than something drivers should cover with a blanket whenever a horse passed by, as suggested by the Farmer's Anti-Automobile Society of Pennsylvania?
The answers to such questions, along with many more entertaining anecdotes, lie at the heart of Market Rebels: How Activists Make or Break Radical Innovations by Stanford Business School professor Hayagreeva Rao. The book's thesis is that the often informal groups of activists who line up for or against an innovation are key to its acceptance or failure. Unfortunately, Market Rebels is uneven, with explanations that aren't always persuasive. Moreover, its academic tone is likely to put off some readers.
With automobiles, the necessary activists were organized but dispersed groups of enthusiasts who labored to assure the public that cars were safe to drive and be driven in. Members of car clubs (including the forerunners of the AAA) worked to get state legislation for registering and licensing cars and won road-use laws that reassured drivers, pedestrians, and horse owners. "Reliability contests," again organized by enthusiasts, helped convince the public that cars weren't merely explosions-in-waiting. And the existence of a potential group of consumers in turn enabled manufacturers to build brands that became icons of the 20th century.
In fact, Rao argues, the battle for the hearts and minds of Americans was over by 1912, before Henry Ford ramped up mass production of the Model T.
The author sees two forces at play here, which he dubs "hot causes" and "cool mobilization." In the former, activists wax emotional about issues that matter to them. Cool mobilization, on the other hand, engages broad audiences in new behaviors and experiences. Car buffs' pride in their vehicles led them to stage contests that showed off engineering and design virtuosity. These "hot cause" demonstrations ultimately mobilized the wider public to try driving for themselves.
Rao's definition of radical innovation is broad. His topics range from how an "evange-ale-ist" craft beer movement facilitated the rise of microbrewing in the 1980s to how a phalanx of rogue chefs sparked the nouvelle cuisine revolution in French gastronomy in the 1960s. He also considers how investor-rights gadflies prompted a redistribution of corporate power and charts the achievements of the foes of the German biotech industry.
Such variety can be enlightening, but at times the approach seems scattershot. An intense attention to detail in some instances is countered by a startling jump to conclusions in others. In attempting to explain the failure of the Segway Personal Transporter, for instance, Rao outlines all the factors that were in place: heavyweight financial support from celebrated venture capitalist John Doerr, high-profile owners such as Apple (AAPL) co-founder Steve Wozniak, and well-orchestrated marketing razzmatazz. There were even Segway enthusiast groups: All the hot causes that a reader of this book might expect to lead to cool mobilization—and success. But then Rao tells us that "the Segway movement has neither caught the imagination of the public nor mushroomed across the United States," without attempting to explain its lack of success in his own terms. Might the more usual reasons given for innovation failure—such as that the product maybe wasn't right for the market or the time—be more applicable here than Rao's theory?
Rao's field of interest seems akin to the much-discussed phenomenon of Web 2.0-enabled digital networks. Strikingly, he doesn't even mention the Web. But there is merit in his choice of cases that have met the test of time, and his conclusion that informal networks may decide business success or failure in coming years is provocative and timely. Although it is a somewhat flawed call to arms for executives to "think like insurgents," Market Rebels offers worthwhile lessons about how to do just that.