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.

Strategy Canvas

In a previous post, I mentioned Kim & Marbourgne’s 2002 book “Blue Ocean Strategy.” One of the tools introduced in their book is the “Strategy Canvas,” a graphical tool that makes it easier to compare & contrast the strategies of different firms or products.

Here’s the Strategy Canvas for the Thummer, comparing it to the keyboard & guitar:

Fig. 1: Strategy Canvas

Across the horizontal axis are characteristics of comparison & contrast, and the vertical axis provides the scale for comparing & contrasting them.

Tradition: To support the deepest Western traditions of tonality, Thumtronics is breaking the superficial traditions of musical instrument design, music theory, music notation, sound generation, etc. As the French might say, “C'est la vie – plus ça change, plus c'est la même chose” – or, “such is life; the more things change, the more they stay the same” (to translate this phrase into today’s lingua franca). Hence Thumtronics will doubtless be perceived as threatening or devaluing tradition (as shown in the graphic above) despite the opposite being the case.

Craftsmanship: Craftsmanship is the manual labor of skilled workers. Such skilled labor is expensive; most people can’t afford it. I want to make the Thummer affordable by everyone –including everyone in the Third World, eventually – so I’d rather have Six Sigma quality standards on the automated manufacture of a cheap electronic instrument than the dubious benefits of craftsmanship.

Dedicated Repertoire: The pieces in a dedicated repertoire are specifically optimized to take advantage of the unique features of the instrument for which they were written. Consider for example the piano’s ability to glissando across the diatonic notes of C Major. That precise effect can’t be captured on any instrument other than the piano-style keyboard. The Thummer has the expressive power to develop innumerable unique musical effects such as the piano’s glissando, but because the Thummer is new, there are not yet any pieces written specifically for (i.e., dedicated to) the Thummer.

Dedicated Channel: This is the worldwide network of brick-and-mortar retail stores which sell music products exclusively or primarily. To sell a new musical instrument through this channel, Thumtronics would need to train salespeople to stand around in these stores demonstrating to passers-by how to play the instrument. This would be phenomenally expensive, which would require that the Thummer be phenomenally expensive, too. No new musical interface has ever survived the attempt to "cram" it through traditional retail this way. In its early low-volume days as a niche product, the Thummer needs a lower-cost distributipon channel: online direct sales, supplemented by customer-created music videos on YouTube, live performances, etc.. Once musicians have created sufficient demand among consumers, the Pocket Thummer can be sold through mass-market retailers, booksellers, and video game stores. Once a sufficiently-large installed based of Thummer-players exists, a high-status Thummer can be sold through the dedicated retail channel, because for such a high-status product, the dedicated channel's high service costs are perfectly warranted. But only then, not now.

Expressive Potential: The piano has one degree of freedom: key velocity (how hard you strike a key, basically), and a few binary foot-pedal switches (una corda, sostenuto, & sustain). The electric guitar has more degrees of freedom: string bending, the whammy bar, tone dials, effects pedals, etc. But the Thummer absolutely blows them away, with thumb-operated joysticks & motion sensors that offer ten degrees of freedom,, with the potential for more.

Creative Potential: When the piano-forte was new in the 1700’s, it enabled creative musicians to do things that had never been done before; so was the electric guitar when it was new in the 1950’s, and the keyboard synthesizer in the 1970’s. Since then, however, generations of musicians have dedicated themselves to exploring every novel possibility offered by those instruments. As a result, today there are no new musical effects unique to those instruments which have not already been beaten to death. Their creative potential is now zero. On the other hand, the Thummer is chock full of creative potential. Its unique expressive power, combined with the novel musical effects made possible by Dynamic Tuning (which only a Thummer can control) expand the framework of tonality, presenting a vast frontier of creative possibilities. Someday, after future generations of creative musicians have mapped out this new frontier, it too will be drained of all creative potential – so beat the rush! :-)

Success Rate: Of a hundred musical novices, how many will reach a level of competence that allows them to play music with and for their friends, to improvise confidently, and to write their own compositions for special occasions? That’s the level of musical competence that most music students seek, and would be satisfied with. But with traditional approaches to music education, the percentage of students who attain this level of success if pathetically low. It is Thumtronics’ primary objective to deliver the highest available success rate in music education. The Thummer note-layout and the ThumMusic System apparently have the potential to accomplish this objective.

Ease of Learning: Students will have a higher success rate when learning is easy than when it is hard. The combination of the Thummer (including the computer-keyboard-based QWERTY Thummer) and the ThumMusic System make music dramatically easier to learn, by exposing music’s underlying structure in a logical and systematic way. The piano and guitar don’t even come close.

Depth of Learning: Music students do not sacrifice depth to gain the Thummer’s ease of learning. The logical elegance of the Thummer and ThumMusic System not only make it easier to learn the basic concepts of music, but also to understand what would otherwise be considered to be “advanced concepts” in music theory. Traditional approaches to music education make these “advanced concepts” so difficult to understand that music students’ primary and secondary educations are focused almost entirely on performance, ignoring theory almost completely until the senior secondary or even tertiary (college) level. Even then, “music theory” is often presented not as a unifying theory of how music works, but rather as a long sequence of individual musical practices to be memorized. The Thummer and ThumMusic System can give students much greater depth of understanding, more easily.

Breadth of Learning: Music education today is focused very narrowly on 12-tone equal temperament, the tuning system that’s been in vogue most recently in the Western world. But other cultures use other tuning systems, and so did the West until quite recently. These tuning systems from other times and places are very difficult to teach, learn, and play using traditional Western instruments, but they are trivially easy to use on the Thummer and with the ThumMusic System. Just wiggle a joystick, and voila! You’re playing in the tunings of Pythagoras, Mersenne, Scarlatti, Handel, Bach, Hadyn, Mozart, Beethoven, etc. Wiggle it a different way, and you can explore the tunings of Thailand, Indonesia, Arabia, Turkey, or Mandinka Africa. The Thummer and ThumMusic System offer an unparalleled breadth of learning.

Cheap to Acquire: All of this simplicity and power would be valueless if it were unaffordable. To make an impact on the world, Thumtronics’ products must be affordable. Thumtronics’ potential products run the gamut from the free QWERTY Thummer (a free software implementation of the Thummer’s note-pattern on a standard computer keyboard) through the Pocket Thummer (and economically-priced entry-level instrument for consumers) to the feature-packed eMotion Thummer – and even this high-end model is expected to be priced affordably. The key to “blue ocean strategy,” after all, is in offering a product that is (a) highly differentiated in ways that consumers value (b) at a low price, thereby delivering exceptional value to the consumer. Overprice your offering (as Apple did with its Macintosh computers) and you are just creating a market opportunity for your competitors (Microsoft Windows). This Thummer will always be affordable.

Cheap to Learn: The cost of any product includes its acquisition cost, its implementation cost, and its risk of failure. The risk of failure was addressed above in “Success Rate,” and cost of acquisition in “Cheap to Acquire.” Being “Cheap to Learn” embraces not only the success rate, but also the cost of that success. Thumtronics expects to provide free music lessons online to beginners, charging only for the intermediate and advanced lessons. Thumtronics can afford to do this by delivering its lessons primarily online, and by having these lessons be developed primarily by volunteer developers using open source methods. The student’s time is also a cost, but students should progress to a given level of competency much faster due to the ThumMusic System’s ease of learning, so the “time cost” of learning should also be lower. Finally, because the students’ can expect to succeed at a higher rate, fewer will experience the cost of failure, lowering its average cost per student. Every way you slice it, the Thummer will be cheaper to learn than any other musical instrument…without sacrificing depth or breadth.

Discussion
Thumtronics' product innovations and business strategy deliver a highly-differentiated "value innovation" to the mass market of non-musical consumers – exactly what is required to deliver rapid, profitable, sustainable sales growth.