Go-to-Market Strategies & OS Partnerships

Thumtronics has four different strategies for getting the Thummer to market, depending on the kind of deal it can make with future investors.

1. US Independent: Bring the Thummer to market as in independent US firm, climbing up The Long Tail from low-volume “niche” sales in the first couple of years to high-volume “mainstream” sales thereafter.
2. Chinese Independent: As above, but partnering with a Chinese OEM of electronic musical instruments to complete the Thummer’s engineering and undertake its manufacturing.
3. OS Partner: Partnering with an operating system (OS) vendor – Apple, Microsoft, or Sony – to bring Thumtronics’ innovations to market.
4. Open Project: If all else fails, assign Thumtronics’ IP to a non-profit organization which can lead the open, non-profit development of Thumtronics’ innovations.

The Independent options could lead to an OS Partnership, with an OS vendor buying Thumtronics after its products’ potential had been proven in the marketplace.

Why would an OS vendor care about Thumtronics?

OS vendors such as Apple, Microsoft, and Sony are currently fighting a pitched battle to control the technology standards for connected entertainment, including music. This competition has been most obvious to consumers in battles over “downstream” music data formats, such as AAC, WMA, and ATRAC. OS vendors are also competing to gain similar proprietary advantages “upstream.” One example is Apple’s Core Audio, which Apple says “let you do things that are simply not possible on other platforms.”

Thumtronics’ innovations are sufficiently disruptive that an OS vendor could use them to add proprietary value to many of today’s music technology standards (aka embrace and extend or de-commoditization), making its platform even more attractive to the creators of musical content, and giving it greater influence over downstream music-related standards, too.

Any one of Apple, Sony, or Microsoft would benefit from a partnership with Thumtronics, albeit each in different ways.

Who Cares?

Is there independent verification of claim that consumers care about the benefits develiered by the Thummer & ThumMusic System?

Yes.

In a study of 3,500 consumers conducted during the last global recession (Stimulating Consumer Demand through Meaningful Innovation, Accenture, 2002), Nunes & Johnson found that consumers most often singled out two problems as needing “better” solutions:

• Improving their physical health and sense of well-being, and
• Helping them learn or providing intellectual stimulation.

Clearly, learning to play the Thummer with the ThumMusic System can help consumers "learn and provide intellectual stimulation.” But what about improving consumer’s physical health and well-being? Can the Thummer do that, too?

Yes.

A study (Kigoa & Tims, 2001) of mature students taking music lessons, compared to a control group that did not take such lessons, found that among those taking lessons:

• Blood tests indicated a 90% increase during the test period in levels of Human Growth Hormone (hGH, which increases energy and sexual function, while decreasing the occurrence rate of illnesses), and
• Anxiety, depression and perception of loneliness all decreased.

These improvements in physical health and well-being did not occur in the control group. This is just one of a host os similar studies on music and wellness. Clearly, learning to play a musical instrument is good for you.

Indeed, learning to play the Thummer can address many of consumers’ other stated needs, too.

Here’s the full list of benefits sought by consumers from Nunes & Johnsons’ study:
Learning to play music with the Thummer can help consumers satisfy many of these perceived needs. You want more free time? Learn to play an instrument that’s easy instead of one that’s hard. Want to make the most of your free time? Learn to play the Thummer, which requires less practice to get an equivalent amount of enjoyment. Want help pursuing your interests/hobbies? If your hobby involves making music, then learning to play the Thummer can help you more than learning any other instrument. Want to connect with your friends & family? Get together and make music with the simple, flexible, portable Thummer.

In short, the Thummer offers a simple, cheap, and effective way of acquiring each of the benefits most sought by consumers.

Value Map

One way to compare product strategies visually is to draw a Value Map, invented by Kambil & Ginsberg in 1997 (Kambil is Global Director of Deloitte Research) and improved by Osterwalder in 2004.

The Value Map for Thumtronics looks like this:

Figure 2: Value Map

Caveat: In the Value Map above, Thumtronics’ various competitors are placed to indicate their overall value proposition, not to make fine distinctions as to which is slightly leftward or rightward of the others at each given price level.

The music products industry today has a well-defined Value Frontier – the solid grey line sweeping up from left to right in Figure 2 above. In the middle are most of the companies you’re likely to recognize – Yamaha, Fender, Gibson, Kawai, etc. Their products follow a trajectory of sustaining innovations along dimensions of price and functionality that customers expect. These sustaining innovations keep their products from being completely commoditized, so that they can be sold at market prices or slightly higher.

At the upper right of the Value Frontier are those firms whose products earn a premium price for excellence. Steinway and Baldwin pianos, Paul Reed Smith guitars, and Buffet-Crampon wind instruments are indicative here.

At the lower left end of the Value Frontier are firms who have found new ways to earn a profit from the sale of commoditized products at economy prices. Examples include First Act, which sells commoditized band instruments and guitars through Wal*Mart, Fender’s low-end Squire brand, and Pearl River, the first Chinese manufacturer to sell large quantities of “good enough” pianos under its own brand name in the USA.

The introduction of the eMotion Thummer shifts the industry’s Value Frontier decisively rightward, to the dashed grey line. The eMotion Thummer offers unique and disruptive advances in expressive potential, creative potential, and ease/depth/breadth of learning that no other product can offer – and does so at a Market price.

Thumtronics can then ride its new Value Frontier down and leftward by introducing the Pocket Thummer at an Economy price. Although the Pocket Thummer’s portability and low-cost polyphony are potentially disruptive to Thumtronics’ competitors, it is sustaining with regard to Thumtronics’ newly-established Value Frontier – hence its being categorized as a Sustaining Innovation.

Finally, Thumtronics’ QWERTY Thummer is an implementation of the Thummer’s note-pattern on the standard computer keyboard, offered absolutely free. Because the Thummer’s note-pattern is, by this time, “expected” on Thumtronics’ new Value Frontier, it is neither a sustaining nor a disruptive innovation from Thumtronics’ perspective, and so is categorized as offering “Me-Too” value – albeit at the all-important “Free” price level.

Once Thumtronics’ new value frontier becomes the industry’s new status quo – perhaps a decade hence – the eMotion Thummer and its related products will lose their disruptiveness and migrate leftward on the Value Map. The installed base of Thummer players (which should by then be quite large) should then allow Thumtronics – still protected by its numerous fundamental patents – to introduce a “quality” brand whose excellent products can attract premium prices (the way Toyota created the "Lexus" brand to differentiate its new low-volume, high-margin cars).

As with the Strategy Canvas, the key point of the Value Map is that Thumtronics' strategy delivers a disruptive leap in functionality at a low price through novel channels – exactly what is required to deliver rapid, profitable, sustainable sales growth.