How Hits Happen: Forecasting Predictability in a Chaotic Marketplace [Hardcover]

Winslow Farrell (Author)

Book Description

Publication Date: June 3, 1998

What makes a hit a hit? How does a movie like "Titanic" captivate the publics eye--and break box office records worldwide? What set Hootie & the Blowfish apart from countless other bands struggling to make it big--enabling them to sell more than 13 million copies of their debut album? What forces thrust Tickle Me Elmo to the top of every child's Christmas list last year, creating a feeding frenzy and waiting lists several months long?

Just how do hits happen?

Managers and marketing gurus alike have struggled to find the answers for years. Using outdated strategies and theories, they make foggy predictions based on past performance. Yet no matter how much research and marketing money you pour into a product, the biggest hits always seem to come out of the blue.

But do they really? In "How Hits Happen, " Winslow Farrell, partner in the Emergent Solutions Group at Cooper & Lybrand, offers a breakthrough approach to uncovering the hidden patterns behind hits. Applying complexity theory--the science that examines the interactions of various factors in complex systems--to modern business problems. "How Hits Happen" reveals how the actions of synthetic customers shed light on consumer behavior in the natural world. These computer-generated "consumers" embody quirks and contradictions, motivations and behaviors that uncannily resemble our own. They shop, go to movies, listen to music, and form cliques--in turn making or breaking the virtual products they're confronted with. Motivated by popularity, product placement, advertising, and simple preferences, their purchases are a powerful predictor of the next giant hit...or the next huge flop.

"How Hits Happen" turns thefindings of this technology into a practical, accessible guide to consumer behavior for businesspeople everywhere, from marketing managers to management consultants, strategic planners to small-business owners. Fascinating, compelling, and truly revolutionary, it reveals invaluable lessons for managers in any real-life industry.

Advanced Praise for "How Hits Happen"

"A mind-bending exploration of the nonlinear dynamics of fads, fashions, and high-tech markets. If you are contemplating creating new markets in this world of increasing return economics, read this provocative book."
--John Seely Brown, Chief Scientist, Xerox Corporation, and Director, Xerox Palo Alto Research Center

" "How Hits Happen" is a lively and eminently practical condensation of the complexity sciences and their implications for product and marketing innovation. Farrell dispels old myths and delivers a wealth of new ideas that will forever change the way you think about how hits happen."
--Paul Saffo, Director, Institute for the Future

"Since everyone wants a hit, this knowledgeable primer on applying the new sciences of complexity could become pretty popular. I hope so--not because the world needs more subtly engineered hits, but because complex adaptive systems are where and how we live, and understanding helps."
--Stewart Brand, Director, Global Business Network

"[ "How Hits Happen" ] is clear and readable. It is entertaining. And it is the best book I have seen yet on what the new ideas of complexity theory have to do with the concerns of business."
--W. Brain Arthur, Santa Fe Institute

Editorial Reviews

Amazon.com Review

How is it that certain sites become the superstars of the World Wide Web? What makes Internet-based stores and services, such as America Online, burst into public consciousness? The process is the same, Farrell explains, as that which took Hootie and the Blowfish from bar band to supergroup at record speed or made Beanie Babies the national craze.

Farrell shows how social interactions create hits, both online and off. Better yet, he demonstrates how computer models are using the mathematics of complexity theory to help predict the hit or flop potential of new ideas, products, and services. What makes the models so fascinating is that they behave as groups of individual consumers, running in simulated communities inside the computer, approximating the reactions of their flesh-and-blood counterparts.

While the principles here apply to the entire world of business, they are particularly essential for those who wish to create an audience or customer base on the Internet, where the hit-creating (and preventing) forces seem to be particularly volatile. And while Farrell makes it clear that hits cannot be manufactured on demand, he is able to provide good advice on tactics, which can swing the odds more in your favor. --Elizabeth Lewis

Review

"A mind-bending exploration of the nonlinear dynamics of fads, fashions, and high-tech markets. If you are contemplating creating new markets in this world of increasing return economics, read this provocative book." -- John Seely Brown, Chief Scientist, Xerox Corporation, and Director, Xerox Palo Alto Research Center

"How Hits Happen is a lively and eminently practical condensation of the complexity sciences and their implications for product and marketing innovation. Farrell dispells old myths and delivers a wealth of new ideas that will forever change the way you think about how hits happen." -- Paul Saffo, Director, Institute for the Future

"Since everyone wants a hit, this knowledgeable primer on applying the new sciences of complexity could become pretty popular. I hope so -- not because the world needs more subtly engineered hits, but because complex adaptive systems are where and how we live, and understanding helps." -- Stewart Brand, Director, Global Business Network

"[How Hits Happen] is clear and readable. It is entertaining. And it is the best book I have seen yet on what the new ideas of complexity theory have to do with the concerns of business." -- W. Brian Arthur, Santa Fe Institute

See all Editorial Reviews

Product Details

• Hardcover: 256 pages
• Publisher: HarperBusiness; 1st edition (June 3, 1998)
• Language: English
• ISBN-10: 0887309070
• ISBN-13: 978-0887309076
• Product Dimensions: 6.7 x 4.4 x 1.3 inches
• Shipping Weight: 7.2 ounces
• Average Customer Review: 3.1 out of 5 stars  See all reviews (19 customer reviews)
• Amazon Best Sellers Rank: #3,518,867 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

8 of 8 people found the following review helpful:

2.0 out of 5 stars Don't how how to use the lesson, December 11, 1999

By 

j4u - See all my reviews

This review is from: How Hits Happen: Forecasting Predictability in a Chaotic Marketplace (Hardcover)

Overall I didn't find many new lessons and I didn't know how to use the lesson I got in the book.

The biggest lesson I got is a new approach of complexity model to predict a market success. Is it a brand new lesson? Well, not exactly. We all learnt some 'critical mass' and 'networking effect' in business strategy course. However, it does arouse my interest and that's why I bought it. Yet as I read through the book, I found the author provided many examples to prove that complexity model/non-linear model is an appropriate one to predict a hit. But the problem is I already buy-in the theory before I bought the book. What I really want is a method or some tips that I can use in my everyday work. However, I didn't find it. The book did mention some computer simulation program; however, I don't know the program and I don't have the program.

Net, I found this book could be a good introductory book on complexity in business world. Yet recommend 'not to buy' for business managers who need direct applications on their everyday business.

2 of 2 people found the following review helpful:

5.0 out of 5 stars Excellent ideas on creating your own hits, April 23, 2004

By 

Robert W. Bradford "President and CEO of Cent... (Ann Arbor, MI United States) - See all my reviews
(REAL NAME)   

This review is from: How Hits Happen: Forecasting Predictability in a Chaotic Marketplace (Hardcover)

One truism we have often heard in strategy seminars is that you can't plan your way into a fad. Thus, the success of Ty's Beanie Babies or Tamagotchi cannot be the result of good strategy - they are merely accidents that we would all like to have. In How Hits Happen, the author postulates that hits of any sort actually have some common elements that we can seek when attempting to emulate Furbies and pet rocks.

Most of this book details the history of large-scale artificial life simulations used by Coopers and Lybrand, and the text leans to the poetic rather than the practical, but there are still several nuggets of usable information:

-Target people who "lead" your market. These are the equivalent of the "cool kids" of our Junior High School years - they tend to adopt new buying patterns before everyone else does, and others in the marketplace follow their lead.

-Generate excitement about your products or services. Just another product is NOT noteworthy. To get people talking about you, you have to do something a little off the wall.

-Understand the patterns customers use to distinguish a "good product" from a "bad product". This enables you to find the cues that will give the customer instantly good feelings about your product.

-Remember that you are targeting customers who are human beings. They don't think of themselves as, say, young professionals. Most customers tend to think of themselves in terms of what they consume.

-Create and nurture communities of evangelists who will preach the joys of doing business with your company. Involve them in your product design. Play golf with them. Give them special
treatment for being your ambassadors to the market. Software companies, for example, often send pre-release beta versions of their products to their most ardent supporters.

-Watch for signals that your market is about to change precipitously. The "explosions" that create hits can often be created with just a little push in the right place at the right time.

-The internet is a powerful medium for generating hits. "Buzz" in an internet discussion group or on a web page can translate into powerful word-of-mouth advertising outside of the internet. This is true because many of the risk-seeking early adopters who help to "create" hits are spending a lot of time on the internet these days.

-Manage availability to enhance your hit status. Sometimes, being ubiquitous helps build network externalities which make your product more valuable to the buyer as more and more customers get on the band wagon. In other instances, scarcity enhances perceived value by making your product something the customer has to work to obtain.

In all, we'd like to see a book like this that is a bit more prescriptive than descriptive, but How Hits Happen is still engaging and thought-provoking. I would definitely suggest this book as a source of ideas for anyone involved in product development.

2 of 2 people found the following review helpful:

4.0 out of 5 stars New tools for winning in the New Economy, June 9, 1998

By 

[e-mail] (San Jose, CA) - See all my reviews

This review is from: How Hits Happen: Forecasting Predictability in a Chaotic Marketplace (Hardcover)

In "How Hits Happen", Winslow Farrell provides what will be for many managers a first glimpse at how market leaders will be thinking in the post-linear world of the new economy. Farrell clearly shows that the current extrapolative, generalizing, top-down, spreadsheet-oriented view of the world is becoming an increasingly distorted lens for viewing markets and what drives them. Powerful, creative successes are nonlinear, arising seemingly spontaneously from the relatively simple interaction of large numbers of independently acting and communicating people.

The relevance of this book goes far beyond the entertainment industry from which it draws its examples-hits are an emergent phenomenon in every market. Farrell provides numerous examples of what happens when markets catch fire, when the "buzz" surrounding a product travels like a contagion through the network of relationships in a population, fanning out from the "in" crowd to the rest of us.

"How Hits Happen" is the bottom-up counterpoint to Geoffrey Moore's "Crossing the Chasm", the hit marketing manifesto for the high tech community that has become the default worldview in Silicon Valley. Moore described how new product adoption is driven by influencers, in a trickle-down process between distinct segments of a market-- segments separated by gaps and chasms. Farrell draws on the fascinating and relevant tools of complexity theory and multi-agent simulation to show *how* influence works, *why* there are gaps and chasms, and that managers can adaptively interact with markets to recognize hit potential. Perhaps the most important lesson is that we can add "energy" at the right place and the right time to help turn product potential into phenomenal success.

But be forewarned-- the book leaves a number of questions unanswered. Such as "What are the warning signs of an impending hit?", "How do we adapt to emergent market behavior to fan the flames?", and "When and at what level should action be taken?" Farrell and his team at Coopers ! & Lybrand are on to something big, pioneering the application of complex adaptive systems, artificial life, and simulation to real-world businesses. Neatly wrapped answers are lacking only because these are the early days, and much lies waiting to be discovered.

Despite the high ratio of description to prescription, I encourage anyone interested in why products like Barbie, VHS and Windows win in the market to read this book. This is exciting territory-- the forces have been set into motion for a dramatic shift in business thinking.

--Ken Karakotsios Author of "SimLife" software, co-founder & CEO of Salamander Interactive