'peeps creative

Our client won't shut up. They are giving away all of their intellectual capital on a daily basis through video blogging, tweeting and yammering away to any web news source that will write a couple words about them. It's completely against everything you learn in business school and it's going to tip their company. To be sure, we started out on the side of caution, but it didn't take too long for us to see the Airwalk phenomenon in action. Harold and Graham at OWLE have never read Gladwell; they're just being who they are: innovators evangelizing to the like-minded. They'd be doing the same thing if someone else had come up with OWLE. The happy coincidence here is that they not only stand to earn the respect and admiration of their fellow innovators, they actually own the company, too.

OWLE is on the airwalk track: In the mid 1980’s, Airwalk started in San Diego making shoes for skateboarding, a.k.a. air walking. It had a niche market segment among cult skateboarders, worth 13 million revenue. In the early 1990’s, the owner changed course and wanted to broaden the products and the market, using active alternative life style concept. They hired a small ad agency, Lambesis. Its revenue surged from 1993’s 16 million to 1995’s 250 million revenue. In the mid 1990’s, Airwalk tipped.

The best way to explain how Airwalk tipped is by using the diffusion model, a model developed by Bruce Ryan and Neal Gross, 1930’s. They studied how a new superior corn seed was introduced in 1928, adopted by handful farmers in 1932-1933, and prevailing a few years later. The farmers were classified into innovators, early adopters, early majority, late majority, and laggards. Although the distance between early adopters and early majority seems to be little, there is actually a wide chasm between them. While early adopters tend to perceive risks in a positive way, early majority undoubtedly perceive risks as negative. To close the gap come the roles of connectors, mavens, and salesmen.

Connectors, mavens, and salesmen translate the language of innovators and early adopters into a common language that makes most emotional appeal to early majority. They tweak the innovation – the idea – a bit by changing the original idea into one more fit to the majority context. This kind of “distortion” is easily found in the spread of rumors that change along the way, becoming the “mainstream truth” however incorrect.

First, the company conducted a market research of what were the trends happening in the street. It then followed the suit and made ad campaigns in the context of pervasive trends. In other words, Airwalk piggybacked the already-happening trends. In order to do that, Airwalk’s market research focused on certain young cool kids, the trendsetters. Ms Gordon of Lambesis, an inspiring figure of Airwalk’s ad campaigns, was behind the epidemic. She took the role of a maven, a cool fashion maven. The ads as already mentioned above were then designed in such a way that they uniquely touched the market.

Finally, it should be mentioned also that to maintain an innovative epidemic, the innovation itself should be maintained so that the innovator and early adopter market always has something to diffuse to the mainstream market. Airwalk failed to do it. Consequently in 1999, Airwalk epidemic started to falter because it gave up all of its innovation to the mainstream without any new innovation being introduced.

We’re in the middle of launching a product and a company that is following this same trend model. Like Airwalk, OWLE is starting underground. It’s ‘open-source’ iPhone hardware is largely appealing to a small group of tech-savvy iPhone 3GS users – the innovators – who gravitate toward new technology (especially hacks and less-than-approved work-arounds). There is already some spill-over to other early adopters even in these early sales who already carry an iPhone and use it for video. These connectors and the salesmen who will compose a large percentage of the next wave of OWLE owners will tip the OWLE products into the mainstream even as new OWLE products are being introduced.

Unlike Airwalk, OWLE has the advantage of being founded by the innovators who will not stop innovating. There is a conscious effort to keep research and development chugging along to keep the tipping-point pipeline full.