Transformational Products: The code behind digital products that are shaping our lives and revolutionizing our economies

By Matthias Schrader

In his new book Matthias Schrader, co-founder and CEO of SinnerSchrader, puts the digital transformation on its feet. Whoever starts the digital transformation at the company has already lost. In the meantime, digital products from companies such as Google, Apple, Facebook and Amazon are conquering the everyday life of users. They successfully penetrate sectors such as banking, insurance, telecommunications, retail and automotive. Many companies are in danger of losing their relationship with their customers. They become interchangeable. Matthias Schrader deciphers the code behind the Transformational Products, with which Google & Co. successfully reshape entire markets. The book also provides a playbook for the successful development of Transformational Products in the corporate context. In the end, it bridges the gap between product development and the digital transformation of companies. Transformational Products turn classic marketing into a legacy and thus from a solution to a problem. The weapons of advertising (promotion), distribution (place) and pricing policy (price) have become blunt. Digitisation is a huge challenge for the product, the fourth P in the marketing mix. The focus on the product as a success factor forces companies to focus on the concrete value-added contribution for their customers.

• Language: English
• Publisher: Next Factory Ottensen
• Release date: Jul 5, 2021
• ISBN: 9783981871173

Matthias Schrader

Matthias Schrader is one of Europe's digital pioneers. He founded digital marketing and advertising agency SinnerSchrader in the mid-90s and began to develop e-commerce solutions for startups like Intershop, Ricardo and buecher.de, enabling them to go public earlier than expected. In 1999, SinnerSchrader issued a public offering of its own and was one of only a handful of fledgling companies that survived the so-called "new economy" and actually emerged strengthened by the experience. In 2006, Schrader founded the NEXT Conference which has become the leading symposium for digital transformation in Europe. Today, the author, with his team of more than 500 consultants, designers and software engineers, continues to assist many large DAX index companies to develop cutting-edge digital products. In February 2017, the worldwide management and technology consultancy Accenture announced it was taking a controlling interest in SinnerSchrader for a nine-figure sum.

Book preview

The rise of the personal computer

MOORE’S LAW REVISITED

For more than 50 years → Moore’s Law

has been the yardstick against which digital transformation is measured. The passing of seven Moore cycles – roughly 10 years – means a processor that was once worth a thousand dollars would now cost less than a bag of coffee. Wait another seven Moore cycles and it will only cost a dime. Price isn’t the only thing that shrinks, the size of the hardware keeps getting smaller, too. A Raspberry Pi, for instance, is a fully functional PC but it only has the footprint of a credit card. In fact, the computing power of a PC you could purchase in 1999 is available today for a few cents and is ready to be built into all kinds of everyday devices and appliances.

However, you can’t simply map the exponential growth of microchips onto every business model or use it to predict how a certain product will perform in the market. In most cases progress generally follows a sigmoidal, or S-shaped, curve. Along with the exponential growth curve which keeps getting steeper and steeper, say the number of transistors you can cram into a given microchip, there are limiting factors working in the opposite direction. When introducing new products that factor is total market capacity. Even for a product that is theoretically attractive to everyone on the planet there eventually comes a point when it hits a saturation limit.

S-curve growth starts off slowly. PC development initially kicked off with the Altair 8800 (1975) and the Apple II (1977) and initial sales followed a very shallow curve. This was also true when the first wave of home computers appeared, fueled by vendors such as Commodore, Texas Instruments and Sinclair. In 1981, IBM launched its first PC, bringing computers out of the hobby cellar into the office. This development reached its pinnacle in the mid-1990s, so the S-curve took about 20 years to climax.

The introduction of the world wide web followed a similar path between 1995 and 2010. Only this time, the curve took just 15 years to achieve maturity, reaching two billion users worldwide in June 2010. The mobility cycle, which we are in the middle of right now, will progress even faster. Most experts predict the wave will top off around 2020 with virtually every person on the planet above the age of 13 owning a smartphone.

Comparing these curves proves that things are speeding up. Each technological generation profits from Moore’s Law leading to improved performance and lower costs. Originally, an IBM PC cost the equivalent of two month’s pay for an average worker but, around the turn of the century, consumers only needed to plonk down a third of a month’s salary to buy a fully-loaded notebook. A smartphone, especially if it is cross-funded by a telephone company, goes for a single Euro. An Apple Watch in 2017 boasts the same computer power as a Cray-2 supercomputer back in the mid-1980s which was then the fastest – and most expensive – computer in the world.

As for smartphones, we seem to be approaching the peak point on the curve again. The next S-curve is almost in