Gray Space Innovation
Incremental Innovation and Refinement
Gray space innovations are those where there may be some incumbent product or service, but it may be an unestablished or immature market. This is where meaningful improvements to the offering or a small handful of differentiators can be enough for an organization to enter the competitive fray and explore.
Gray Space Innovation
These innovations are defined by the fact that they many times represent incremental innovation. This may be manifested by the organization developing a new set of attributes, a new delivery method, new cost structure, or other innovations. We will explore these in more detail when we cover the ten types of innovation in a few lessons, but the key for gray space innovation is remembering that they are built on incremental innovation.
One misconception, perhaps driven by the interpretation of white space innovation as the "true" innovation, is that gray space innovation is not really "innovation." What is ironic about this is that many of the most famous innovations in any realm, were not white space innovation, but in fact, gray space innovation. Some examples? From Henry Ford's assembly line (actually Samuel Colt's) to Apple's computer mouse (actually Xerox), these innovations may be refined and popularized by one organization, but have their roots in the white space innovations of others. Much of technology, including smartphones, tend to exhibit gray space innovation. A new system or way of operation here, a new sensor there, a revised interface.
- "Fast follower" or incremental approach to innovation allows accelerated cycle times
- Typically lower development cost than white space innovation
- Reduced need/cost to market an already semi-established concept
- Ability to position offering against an incumbent
- Allows a sort of "a la carte" combination of innovations in one offering
- Builds on existing market successes and preferences
- Reduces the number of unknowns in creating the offering around pricing, features, etc.
- Intellectual property protections may not offer total coverage
- Requires some level of differentiation or education of the market (like most products)
- Not as wide of a technology or competence moat to discourage competitors
- Potential to be derivative and confusing for customers
- May enter a market already dominated by the originator or another incumbent
- Requires some speed in development, lest your offering becomes obsolete before hitting the market
Best Utilized By:
Many organizations. This is perhaps the most common and versatile space for innovation, as it allows any organization to leverage its specific strengths while evolving a concept. An organization with an especially strong brand can elect to leverage this fact by popularizing its take on an offering, while an organization with especially efficient organization may elect to come into the market as the low-cost player by leveraging its strengths.
Examples of Gray Space Innovation
Apple's Vision for the Xerox GUI and Mouse
Sometimes, gray space innovation comes down to seeing potential in the offerings of others that even they can't. A pure example of what this can look like is Steve Jobs' visit to Xerox PARC. Xerox saw the GUI and mouse, at best, as an overpriced curiosity, Jobs saw it as a potential revolution in computing. (The most important segment begins at 6:26)
Video: How Steve Jobs got the ideas of GUI from XEROX (6:26)
While there had been thermostats, touchscreen thermostats, even smart thermostats before it, Nest brought the most intelligent features and best design into one product. Central to the Nest concept is its ability to learn from the habits of those in the home, as well as the ability to leverage "the internet of things" to become even more efficient and seamless (for example, relying on the motion sensors in Nest smoke alarms to know when the home is occupied or not, or looking at the weather forecast and adjusting behavior).
While the Nest modus operandi for gray space innovation is to take very boring, "dumb" things and make them smart and sustainable, we can only imagine the developments now that Nest Labs is owned by Google. Please watch the following 2:12 video.
Video: How Nest Learning Thermostat Learns (2:12)
This is an example of a fairly straightforward concept, packaged elegantly, sold brilliantly, and benefiting from tremendous efficiencies of scale. Battery backups for homes, and even home-built power cells to capture solar energy, have been around for years, but, like Nest, Tesla is making it interesting and feasible for the common homeowner. If you wonder about Tesla's ability to make battery backup interesting, consider that they booked $800 million of preorders in the first week, on track to surpass the iPhone for one of the most successful new product launches in recent history. Please watch the following 4:00 video.