The story behind the launch and success of 3M’s Post-It Notes is legendary. I have a slightly different take on it.

Just to refresh the memory, Post-it® Notes were invented in a serendipitous moment within 3M. Dr. Spence Silver of Central Research Department of 3M was working on making adhesive stronger. Instead he created a process to produce adhesive that would not stick strongly.

Dr. Silver had discovered a new adhesive but did not know how to use it. Art Fry, of 3M’s new products department, attended one of his seminars about the new adhesive and had a Eureka moment.

Art was having problems in finding right pages of music during his church choir sessions. He thought of using the new adhesive for a bookmark that could be stuck and removed from the pages without damaging them. The transformation from that to the product that we now see is quite natural.

Importance of Peripheral Vision

One of the highly successful products for a member of Dow Jones Industrial Average, was a by-product of another product or process. But this by-product was not something that was in line with the original objective, which was the development of a very strong adhesive.

Rather the new discovery was opposite of the original goal. If Dr. Silver and Art Fry had stuck to the original objective and blocked out the peripheral vision then they never would have stumbled upon this great product.

Reverse Approach To New Product Development

Unless a company has lots of resources for R&D most of its new product development activities are driven by outside perspective. The company does the market research, understands the customers’ need and then develops products to meet those needs. After that sales & marketing people work to recoup the investment made in the development of the product. This is the usual approach to product introduction.

The Post-It Notes is an example of the reverse approach of the new product introduction. It is an example of developing products from
within the company’s resources as compared to developing products to meet known customer needs.

Dr. Silver was working on producing very strong adhesive because that is what 3M believed the market needed. If 3M had followed that objective then the Post-It Notes would not have seen the light of the day.

Instead, once 3M found an outcome that did not meet the original goal it went ahead and found a market whose need that could be fulfilled by this unexpected outcome and then developed a product using that unexpected outcome.

By-Products – Potential Gold-Mines

Very often companies sit on a gold mine and they do not realize it. During the course of their normal business all companies collect a great body of processes, technologies and products.

These bodies of work usually are not in such an obvious shape that would light the proverbial bulbs in the heads of people but they do contain the seeds of future profitability. Most of them could be refined, retooled and repackaged to meet the needs of many untapped market.

These untapped markets normally do not fall in the direct line of vision of the company. Companies fail to notice them because they are too focused on serving the needs of their customers.

If the companies develop the peripheral vision then they would be in a better position to notice the potential of these by-products, processes and technologies.

Smart Card For Anyone!

To give you an example, one software development services company has executed many projects using Smart Cards technologies for a number of tech companies in Europe and Japan. Their business model is based upon outsourcing. Many tech companies outsourced to them Smart-Card application development projects. In the process this company accumulated great deal of technical competence and a vast collection of software modules and products.

The company recently visited US looking for business. Since its focus is outsourcing it is ignoring what lies in its peripheral vision, which may open at least two other market segments to it.

One is the campus-cards. Campus cards are getting quite popular in the US universities and they present tremendous amount of opportunities to marketing companies to offer them to the students, universities and businesses within campus. It also presents opportunities to tech companies to develop Smart Card based applications.

The second market segment is the loyalty programs. Many metro areas have entertainment guides, which are a collection of coupons that the buyer could use in a variety of restaurants, bars, businesses etc. These booklets are usually sold for $40-80 but could potentially save thousands of dollars to the users.

These programs are paper based with limited artificial intelligence. This is another segment that is waiting for the Smart Card technologies. A tech company can tie-up with the coupon marketing company and develop a Smart Card based application that could reduce the cost of programs and give more features to the participating businesses and users.

These are just two opportunities available to the software development services company to exploit its fruits of labor of Smart Card application development. It has the basic competence, tools & techniques and materials (modules & processes). It just needs to re-tool and repackage them to suit the needs of the two markets, develop a marketing strategy and tie-up with the right partners. Off-course this is not a typical outsourcing project and that is the reason why it is hesitating.

If the motto of 3M had been ‘We Make Glue That Sticks And Keeps On Stuck’ then it never would have invented Post-It Notes. If 3M had only pursued its immediate objective then also it would not have found Post-It Notes. But it did not. One thing that sets 3M apart from most other companies is its ability to consistently identify new products that fill previously untapped markets. What better way to do that then to capitalize on an activity that has already been expensed for – like a by-product coming out of another product development – and develop a product to satisfy the needs of new customer segments?