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There is an adage of conventional wisdom when companies define new products that we should “shoot ahead of the duck.” Wayne Gretzky had his own take on this quote when he famously said, “I skate to where the puck is going to be, not where it has been.”
These wise words emphasize the importance of anticipating future trends and positioning your portfolio accordingly, rather than reacting solely to the present situation. In other words, it’s important to drive business success by being proactive and forward-thinking.
But you can also shoot too far ahead of the duck. There is a term for that phenomenon, somewhat less well known, called the Osbourne effect:
The Osborne effect is a social phenomenon of customers canceling or deferring orders for the current, soon-to-be-obsolete product as an unexpected drawback of a company announcing a future product prematurely. It is an example of cannibalization. The term alludes to the Osborne Computer Corporation, whose second product did not become available until more than a year after it was announced. The company's subsequent bankruptcy was widely blamed on reduced sales of the original product after the announcement.1
Recently I’ve seen an increase in the number of early announcements in our industry. It’s not uncommon now to see a new NAND node or die or an SSD be announced 18 months or even 2 years before it is ready for production – recently headline grabbing products like 1 petabyte SSDs have been announced that may never make it to market. Sometimes these are formal announcements with full blown press releases but, more often than not, they seem to emerge from the pressure to say something new when a leader is presenting at an industry or investor conference. A continuous shift left of product announcements without a commensurate acceleration of technology realization increases the risk of experiencing the Osborne effect for those companies that succumb to the pressure.
This pressure typically is a symptom of companies that have missed a trend to shoot ahead of or to attempt to cover up falling behind on technology development. Leaders of these companies are faced with a quandary. They believe they can’t stay silent: “What will our investors think?”. Imagine the pressure in executive suites and around the marketing department when the company falls behind.
So, they announce revolutionary products early, years before they will actually be available in the market. Investors and the press are momentarily satisfied, but soon reality sets in. Actual business results do not track to these phantom announcements, and customers grow frustrated and lose confidence.
That is the true downside of marketing too far ahead of the duck. It diminishes the enduring trust that customers and investors have in a company. Soon they will start thinking, “How do I know this is really a product? I can’t bank on it. I’ll believe it when I see it…” Trust is critical because to be interested in first-to-market innovations — customers need to rely on their solution providers to deliver what they promise on time. If a company bases its new product on what you’ve promised, and you don’t deliver, your customer's success suffers. Second chances are limited after you lose your credibility. While integrity might not show up on the balance sheet, I would argue there may not be a more important asset a company can have.
That’s why, at Micron, we are very focused on ensuring that when we announce our products, they are genuinely at the level of maturity we communicate. While sometimes it’s important to announce new technologies that have progressed in a lab environment, it’s also important to set realistic expectations of when those technologies will be generally available. Our mission in the Storage Business Unit is: To be the world’s most trusted NAND and SSD storage solution provider. In addition to having compelling product capabilities, how we represent their availability is an important part of achieving that mission.
