The authors define a "killer application" as "a new good or service that establishes an entirely new category and, by being first, dominates it, returning several hundred percent on the initial investment." As they explain, the primary forces at work in spawning today's "killer apps" are both technological and economic in nature. "The technology we are concerned with is the transformation of information into digital form, where it can be manipulated by computers and transmitted by networks." Digital strategies are needed to achieve market dominance. They suggest several, each worthy of careful consideration. For me, this book has two great values: It helps us to understand what a "killer app" is and can accomplish; also, for those lacking a "killer app" and without much chance of possessing one, it suggests how to increase and enhance the appeal of what one does have, such as it is. Given a choice, of course, anyone would prefer to have a "killer app" when proceeding into an uncertain future. Lacking one, there are still opportunities to recognize...and to pursue. Most companies will not dominate but can survive if committed to the appropriate strategies. For them, this book could well be the difference between life and death.
I've just re-read this book and think more highly of it now than I did previously. Larry Downes & Chunka Mui define a "killer application" as "a new good or service that establishes an entirely new category and, by being first, dominates it, returning several hundred percent on the initial investment." As they explain, the primary forces at work in spawning today's "killer apps" are both technological and economic in nature. "The technology we are concerned with is the transformation of information into digital form, where it can be manipulated by computers and transmitted by networks." Digital strategies are needed to achieve market dominance.
The co-authors divide their book into three parts: Digital Strategy, Designing the Killer App, and Unleashing the Killer App. In Part I, there is a brief discussion of one "killer app" in the Middle Ages, the stirrup, which added mounted cavalry to the battle equation. The "lowly stirrup" played a singular role in rearranging the political, social, and economic structure of medieval Europe.
In The Lever of Riches, Joel Mokyr identifies countless other "killer apps" throughout history such as paved streets and sewerage disposal; the lever, wedge, and screw; the heavy plow and three-field system; the weight-driven mechanical clock; spectacles; the printing press; the steam engine; the telegraph; the bicycle; ...each of which also had a truly profound impact.
To repeat, Larry Downes & Chunka Mui concern themselves with the technology of transforming information into digital form. Thus in Part I, they examine the "killer app", explain what they call "the new economics", and then shift their attention to the nature of a digital strategy. They dully acknowledge the disruptive power of "killer apps" which can suddenly destroy the equilibrium of what appeared to be stable systems of commerce and government. For them, business change now originates with digital technology; more specifically, with "killer apps." Strategies are needed to manage (to the extent possible) their impact to achieve sustainable competitive advantage. These strategies must accommodate three new forces: digitization, globalization, and deregulation. The "dirty little secret" to which Gary Hamel has referred is that the strategy industry "doesn't have any theory of strategy creation." The success of any digital strategy may well be the result of what Hamel calls "lucky foresight." Downes & Mui seem to agree with Hamel while offering, in Part II, what they refer to as "a few rules of thumb." They suggest three stages of "killer app" design and carefully explain each. They identify 12 specific principles on which to base the design process. In Part III, they shift their attention to "Unleashing the Killer App" and correctly stress the importance of communication, one which "speaks with the language of ideas, scenarios, options, and what-ifs."
In Chapter 7, the reader's attention is directed to two major corporations, McDonald's and VEBA AG, which illustrate digital strategy in practice. These are, in effect, mini-case studies. It is important to point out, however, that effective digital strategies are not the sole province of major corporations such as these. A "killer app" can quickly increase or reduce the size of any company. Consider the fact that a single dry goods store in Kemmerer (Wyoming) can become the J.C. Penney Company which, in turn, now struggles (with mixed results) to compete successfully with a company whose own history can be traced back to the Walton 5&10 in Bentonville (Arkansas). Downes & Mui assert that "Developing digital strategy...requires components of both problem-pull and technology-push...operating together in a well-functioning organization [in which] the process becomes not only circular but indistinguishable...in a pragmatic, indeed opportunistic, response to the new digital environment."
In the final chapter of their brilliant analysis, Downes & Mui suggest that cyberspace "is fueled by free computing power and free bandwidth...and free software." Consequently, "the social conditions that resulted are raw, and the nature of the business climate, by necessity, less developed." As with The Golden Rule dry goods store (in 1902) and then the Walton 5&10 (in 1950), today's companies must seek out new areas of opportunity and start doing business there. "Those who make the transformation by developing a digital strategy are choosing to engage the frontier on its own terms, just as their counterparts from Europe did in settling the New World."
Larry Downes & Chunka Mui have outlined the process of digital strategy, explained the twelve design principles, and described the experiences of organizations that are transforming themselves so that they can unleash "killer apps." Which companies will conquer the "frontier", whatever and wherever it may be? Which companies will not? In the Digital Marketplace, we won't have to wait very long for the answers. Probably in what seems to be about five minutes. Those who share my high regard for this book are urged to read Malcolm Gladwell's The Tipping Point.
on September 23, 1998
I was disappointed. The 12 principles were so vague as to be useless. As a web developer, every time I read these so-called strategy books I'm so disappointed. They're all written the same way -- the author makes some kind of statement that they think is profound, like "Treat your customers as a market segment of 1" then they write about one or two companies they've found that supposedly follow this statement. Well guess what, for every "principle" you can find a company that violates it and is wildly successful. For example, Microsoft doesn't treat it's customers as a "market segment of 1" and it's kicking *ss. I can easily find examples of successful web companies that don't follow the authors' principles, which leaves me wondering about how serious to take them.
on July 5, 1999
If you ever want to read a book that attempts to use every technology buzzword in existance, this is the one. This book has some interesting examples of companies that are gaining a competitive advantage using technology, but the author's try to be a little too "cute" with their knowledge of industry buzzwords. Give only a cursory reading of part 1 or just skip it and go right to part 2 and 3.
One thing that really annoyed me thoughout the book was the author's attempts to create then overuse something called Metcalf's Law and Moore's Law out of a couple of common sense observations. In each chapter, the authors constantly refered back to Metcalf's Law and Moore's Law as if these "laws" are on the same plateau as some created by Einstein. Both Metcalf and Moore are intellegent, excellent inventors, and astute businessmen, but I would never try to create some "law" out of a couple of common sense observations. After reading this book, I envision the authors having statues of Metcalf and Moore in their offices that they kneel in front of daily for inspiration.
My opinion, don't spend your own money on this book. Borrow it or get your company to pay for it.
on March 27, 2001
My purpose for choosing this book is two-fold. Firstly, it appears on the reading list for the E-commerce course of my MBA/MSE Program at San Jose State University in California. Secondly, the words "Killer Apps" caught my attention because it is apps like these (recall what Lotus 1-2-3 did to the business usage of computers) that give technology its future direction.
Killer Apps are not just a recent digital age phenomenon. They have manifested in past in the form of inventions like arch, pulleys, the steam engine, lightbulbs; and have impacted the society in a huge way. The authors in this book have done a fantastic job of describing the characteristics of true killer apps and have aptly illustrated the degree of impact they can have on the society.
Given the breakneck pace of revolution in technology, the chance of killer apps springing up from previously unknown corners has increased manifold. This book is a must read not only for those newbies starting out their first venture, but also for those seasoned and successful entrepreneurs who wish to reap further benefits by keeping an open-mind in recognizing these killer apps as they evolve.
The 12 principles outlined for designing killer apps really make one think, and, their association with real life examples could not have been more appropriate. Although this book mentions technology as the harbinger for killer apps, it leans more towards strategy than technology itself. So if you are looking for some cool new technology it may not be the best place.
Although a slightly old book, it was, is, and will be very thought provoking because it addresses some fundamental aspects of developing a winning business strategy. The only place where the book falls short is when it refers to some examples like Pointcast as the killer app. Although conceptually Pointcast was revolutionary, it did not turn out to be quite "the" killer app. So, some recent time examples may have to be taken with a grain of salt.
The book lays out a strong foundation about what killer apps are and then develops strategies for designing and launching killer apps. This book is for strategists who would want to pick up the right mix of strategies for their own venture.
on July 12, 2002
"In the end, the real distinction between digital winners and losers is always found in the boardroom" are saying to us Larry Downes and Chunka Mui in their book: Unleashing the Killer App. They think that too often senior managers still believe that technology is essentially a tool to implement strategy rather than the basis of forming it. These executives did not realize that technology became a disruptive force shaking their industrial strategies previously defined in a more stable business environment.
How this could happen? The authors explained in the first chapter that, in a new networked environment, joined Moore's law -every 18 months, processing power doubles while cost holds constant- and Metcalfe's law -the utility of a network equals the square of the number of its users- are dropping exponentially the transaction costs. As transaction costs discovered in the 30's by the economist Ronald Coase are defining the size of the organizations, we can easily understand the increase of mergers, downsizing and outsourcing to keep industrial firms competitive to face new appearing competitors using all the potential of the technology.
In the industrial age, sustainable competitive advantage required leverage over at least one of the Michael Porter's "Five Forces" customers, suppliers, competitors, new entrants, and substitutes. In the digital age, surrounding these five forces are three new forces: digitization, globalization, and deregulation giving harder time to achieve competitive advantage. The value chain is under extreme pressure and is asking to implement a new digital strategy. Such strategy must be constantly rethought and shared by the total organization. Strategy time frame is shrinking from three, five years to 18 months and well thought plans are replaced by moving projects and experiments to test new ideas.
In the second chapter the authors are asking us to design our own killer apps to avoid somebody else to do it. A killer app is a new good or service that establishes an entirely new category not in a scheme of an incremental change but in discontinuity and in big leaps.
Three categories of killer apps are proposed, each one including four killer apps from the external of the organization to networks and to the internal, from the customers to your partners and to your employees.
External -reshaping the landscape- asked to outsource to the customer to integrate the customer in your production process, to cannibalize your market before somebody else is doing it, to treat each customer as a market segment of one for personalization - customization, and to create communities of value for enlarging customer experience.
Networks -building new connections- asked to replace rude interfaces with learning interfaces to gain mutual trust, to ensure continuity for the customer not for yourself to transfer him the advantages of new technology applications, to give away as much information as you can to add value to your information assets, and to structure any transaction as a joint-venture to build long-term relationships.
Internal -redefining the interior- asked to treat your assets as liabilities to concentrate on your information assets; to destroy your value chain to make sure to stay competitive, to manage innovation as a portfolio of options to make sure to be at the forefront of technology, and to hire the children to keep freshness of mind.
In the third chapter the authors are giving us advises from their own experience to unleash the killer app.
To make sure that digital strategy will be implemented the creation of a digital strategy team is recommended with a total involvement of senior managers. A technology radar, a technology pipeline and technical partnerships are other ideas to introduce in the organization to create the necessary environment to surf on the wave of new technologies. Last message from the authors, just do it, means experiment your ideas and your killer app will be coming out.
This book is a real value for CEOs who want to compete in the cyberspace the new marketspace of our common future. Moving to the New Economy is not easy, but we have there, with this book a base to work on the transformation that need our industrial organizations.
on July 3, 2000
This book is thought provoking, but lacks detail and any real clear strategy for unleashing killer apps. The authors appear to lack a fundamental understanding of economics, most glaringly the definition of a public good. (For the record, a public good is both non-rival and non-excludable.) The real-world examples in the book lack precision and fail to inform the reader of how to uncover his or her own killer app. As a primer in e-strategy, it's not bad. But it won't get you much further than first base.
on April 27, 2005
"Are you going to be part of creating the future or are you just going to be a spectator - the choice is yours." - Michael A. Davis
According to Bill Gates "Going digital will put you on the leading edge of a shock wave of change." Maybe you missed the dot-com boom. Are you going to miss the Wireless boom - which will change the world a thousand times over. The time is now to seize opportunity and the "Killer App" will help you do it.
What exactly is a killer app?
"Killer App - a new application so powerful that it transforms industries, redefines markets, and annihilates the competition." Not just a recent digital age phenomenon; inventions like the compass, moveable type, eyeglasses, the steam engine, and lightbulbs have impacted society in a huge way. Downes and Mui did a fantastic job of describing the characteristics of true killer apps and have aptly illustrated the degree of impact they can have on society.
You certainly don't have to look far to see that technology, particularly the Internet, is driving today's economy. Turn on CNBC, read Business Week or browse the Wall Street Journal - you'll find that technology is the prime force creating growth in almost every industry.
Downes and Mui argue that the dominant trend behind the proliferation of killer apps is a combination of Moore's Law (CPU processing power doubles every 18 months) and Metcalfe's Law (network value increases dramatically with each additional user.) These two laws are fundamentally changing how businesses interact with each other and with their customers. Owing to the today's rapidly changing business environment, business owners will inevitably lose out to competition if they're not utilizing the latest technology.
Unleashing the Killer App is divided into three parts:
Designing the Killer App
Unleashing the Killer App
In Part I, there is a brief discussion of one "killer app" in the Middle Ages, the stirrup, which added mounted cavalry to the battle equation. The "lowly stirrup" played a singular role in rearranging the political, social, and economic structure of medieval Europe.
In Part II, what they refer to as "a few rules of thumb." They suggest three stages of "killer app" design and carefully explain each. They identify 12 specific principles on which to base the design process.
In Part III, they shift their attention to "Unleashing the Killer App" and correctly stress the importance of communication, one which "speaks with the language of ideas, scenarios, options, and what-ifs."
Think of and measure your daily operations as a series of unique transactions. Then focus on how these transaction costs can approach zero. With technology allowing for greater interactivity, the ability exists to create online communities where people can share in ways never imagined.
Unleashing the Killer App is an awesome book that will certainly make you think about ways to ride the waves of technological change surrounding us. With that said, it is prudent to consider both traditional and digital strategy, particularly in light of the Dot Com Bust, when developing strategic plans. Two interesting concepts are illustrated in Table 3.1 "Strategic Planning vs Digital Strategy," p. 59 and Figure 3.1 "The New Forces," p. 65.
Michael Davis, President - Brencom Strategic Business Consulting
on October 20, 1999
Downes and Mui do as good a job as anyone setting out a framework for the issues at hand. Having done this, they go on to trot out superficial, irrelevant, or wrong examples to support their points. E-commerce is legit, don't get me wrong, but they spend a lot of time speaking in reverential tones about how everything will be virtual in the very near future. Inadvertently, they paint a very dystopian picture. E-commerce has proven itself to be a robust channel and established firms ignore it at their own peril. But cute the cute GUIs and virtual communities they write about are weak. The digital economy's promise is in wringing billions of dollars out of the value chain for material products. It turns out the Killer App is something much less sexy -- like middleware for back-end database integration.
Twelve principles of killer app design: 1) Outsource to the customer, 2) Cannibalize your markets; 3) Treat each customer as a market segment of one; 4) Create communities of value; 5) Replace rude interfaces with learning interfaces; 6) Ensure continuity for the customer, not yourself; 7) Give away as much information as you can; 8) Structure every transaction as a joint venture; 9) Treat your assets as liabilities; 10) Destroy your value chain; 11) Manage innovation as a portfolio of options; 12) Hire the children.