Blown to Bits

About the Author

Philip Evans and Thomas S. Wurster are senior executives at the Boston Consulting Group. Evans is a senior vice president in Boston, while Wurster is a vice president in Los Angeles. Both authors have extensive experience in strategic consulting and have contributed significantly to the understanding of the new economics of information. Their book "Blown to Bits: How the New Economics of Information Transforms Strategy" explores how the internet and digital technologies have transformed traditional business strategies.

Main Idea

The main idea of "Blown to Bits" is that the advent of the Internet has fundamentally altered the traditional trade-offs between richness (detailed, customized information for a small audience) and reach (broad, generalized information for a large audience). The new economics of information allow businesses to achieve both richness and reach simultaneously, leading to significant transformations in business strategies and structures.

Table of Contents

1. The Mystique and Challenges of New Markets
2. Balancing Resources and Opportunities
3. It's the Problem That Matters
4. What New Markets Are Available to You?
5. The Role of the Customer
6. Funding the New Market Effort
7. Building and Dominating Markets Through Involvement
8. The Role of Information Technology
9. Using Credibility
10. What's Next?

The Mystique and Challenges of New Markets

The digital revolution has dismantled traditional business models and created new markets. The Internet has eliminated borders and barriers, enabling businesses to reach a global audience with both rich and detailed information. This has disrupted industries that relied on physical distribution and localized reach, compelling companies to adapt to the new economics of information.

"New markets are new to everyone, not just to you. Markets start with a need. Combining that need with a product is how you create a new market." – Philip Evans and Thomas S. Wurster

Common Denominators of New Market Success

Successful new markets share several key elements:

• Customer-driven markets: Customers buy what they want, not what you think they want.
• Low-risk paths: Develop a new product for a known market or take a known product into a new market.
• Focused efforts: Avoid chasing every opportunity to prevent resource dilution.
• Cross-functional teams: Creating new markets requires collaboration across different business functions.

Balancing Resources and Opportunities

Creating a new market requires three key resources: money, people, and time. The cost depends on the problem being solved and the audience. People are crucial, as those who excel at initiating markets possess different skills than those improving existing markets. Time is the most important resource, as swift market acceptance leads to dominance and creates barriers for competitors.

"Time is the most important resource and greatest expense for creating new markets, and it should be measured by time to market acceptance." – Philip Evans and Thomas S. Wurster

Know When to Say No

Experience helps recognize failures and avoid wasting resources on unviable markets. Balancing opportunity costs with resources ensures focused efforts on the right problems. Successful companies learn to pick the right problems on which to expend their resources.

It's the Problem That Matters

New markets are created by finding solutions to problems people want resolved. A new market exists at the convergence of a high level of perceived need and a solution that did not previously exist. The key is identifying high-priority problems that keep customers awake at night and creating products to solve them.