Subject To Change: Creating Great Products & Services for an Uncertain World

Doing It Right Online

Kodak, Apple, and even KeyboardCo are all examples of products-as-services with physical components—cameras, music players, keyboards. Also, they're able to control most, if not all, of the system: Kodak makes the cameras, the film, and the paper; Apple sells iPod, develops iTunes, and opens the iTunes Store; KeyboardCo makes the pianos and retails the downloadable music.

Such situations are rare. Many companies simply can't control the system in which they find themselves. Instead, we're seeing a marketplace increasingly filled with functional components that demand greater interconnectedness. Web products, particularly those found under the rubric of "Web 2.0," offer the best examples of how to enter a market by integrating with a larger system outside of your control.

This is best demonstrated in the burgeoning online photo-sharing space. 1999 saw the launch of the Web's significant photo sites: Ofoto, Shutterfly, and Yahoo! Photos. These were all responses to the increasing popularity of digital cameras, and the challenge of sharing those photos and making quality prints.

Skip ahead to 2004, when the digital photography market became surprisingly complex. Sales of digital cameras surpassed film cameras. People's hard drives were full of images. Camera phones became increasingly popular, but it was unclear what to do, exactly, with the pictures you snapped with your phone. Customers were going in all directions in terms of what they wanted to do with their ...