C (9:55)
Yeah, so I would say that all three forms of uncertainty tend to be underestimated by innovators, but behavioral uncertainty is the most tricky to deal with and even perceive. So let's start from technical uncertainty. And by that I mean just the kind of uncertainty about can we even create this product that we're thinking about. So for example, at this time we don't really know whether we can actually create artificial general intelligence. We have forms of AI, but not the AGI. Yes. And so we don't know. There's a lot of companies that are trying to create it. They're investing a lot of money, but we don't know exactly what it takes. So there's a lot of technical uncertainty about that kind of artificial general intelligence. But in a lot of software, software products, and digital products that are software based, technical uncertainty is actually fairly sort of modest or lower. If you want to create an additional feature for your users to do an additional transaction or whatever it is with software, it's actually usually doable. It can be clumsy and you can do it well or poorly or well. But if you have enough code and data, you can create almost any feature. So technical uncertainty tends to be, I think, lower in a lot of digital companies. Market uncertainty, on the other hand, becomes much more of a challenge for all digital companies or companies operating in digital markets. So what is market uncertainty? It's more about kind of the reception, the market reception for your product. So you launch some digital service and you don't really know before you launch it, you don't know for sure if your users will like it, will they actually use it, how much are they willing to pay for it and all that. And when the product is based on software, so it's not very tangible, they can't really try it on in the store or really experience it very well, and it's a new kind of a service, then it's really hard for potential users to imagine how or why they would use it. So they tend to not want it and not express much willingness to pay for it. So that's where we kind of, and not, not me, but the strategy industry and strategic management industry, the whole field of, of academics has, has come up with a lot of kind of practices and techniques like design thinking and early prototyping and, and other kinds of practices that, that we tend to think of kind of falling under lean startup. And so when you follow those practices, you can at least to some degree or significant degree, usually lower market uncertainty, at least enough to decide whether the product or service is sort of likely to be successful or not. But then there's this behavioral uncertainty and that's really the trickiest part. And by that I mean uncertainty about how will users behave when they use your innovation or the new product. And so a lot of these, a lot of digital services entail to greater or lesser degree interaction among users. So there's some communication, some social interaction that users do while using the service. So if you think of social networks, for example, it's very central that, that users interact with each other. And when there's some communication and interaction, the innovating company doesn't really know how that will evolve. So let's think about, here's an example. Email. So everyone knows email by now. It was actually invented in, in the 60s and early 70s to send really kind of technical messages within the, the arpane, one of the kind of predecessors of the open Internet, so intended for technical communication between different universities and the government. But it became a super popular application and people started to send all kinds of messages, communications. And by now I recently heard that the state of Denmark is considering stopping delivery of letters for individuals. So we're almost out of orders, we're just using email. So that's how massive this innovation was. But initially when the, when the idea of email was invented, those inventors had no idea what would happen when people started really using it and sending both not just professional emails, but also personal emails. And there were mailing lists and, and a lot of kind of individual expression that started to bubble up and people formed communities and all kinds of kind of social, sort of what sociologists call meaning creation. So people started using it in ways that they could not anticipate at all. And so if you were the inventor of email, first of all, you had no idea. But second, is there anything that you would have done differently if you had known anything about that? Probably they might have facilitated some of the uses that ended up being really kind of valuable or popular. And so if you understand that your Digital innovation might be associated with this kind of behavioral uncertainty and then this process of social construction that follows where people start to use it and kind of interpret it in various different ways. Then the innovator can facilitate that process, can try to maybe steer it in some ways or at least learn from it quickly, and then adapt the product or service in a way that sort of helps and supports the user's interacting with innovation and using it in more various ways that are more valuable. And so being aware of that process possibly happening after launch is really valuable.
