First talk this morning is by Steven Grey, executive director of the American Press Institute’s “Newspaper Next” initiative.

It is a one-year $2.7 million project of API, in partnership with Dr. Clayton Christensen, Innosight, LLC. It’s goal is to help the newspaper industry diversify.

Various demonstration projects include helping the Boston Globe think about addressing small businesses and the Dallas Morning News think about how they serve busy mothers.

He starts talking about a picture from the paper we worked for from many years ago. It was of a class from a school where everyone in the school subscribed to the paper.

Back then, the local newspaper was one of the only pipes, and everyone read it. Now, there are so many media sources that while people are spending more time gathering news, but the amount of it being done in newspapers has rapidly decreased.

Changes: Editors select news becomes consumers select, or even create the news.
Communities used to be geographically defined, now they are virtually defined.

Steven spends time talking about ‘Disruptive innovation’ as opposed to ‘Sustaining innovations’. With sustaining innovations, the incumbents keep everyone happy, but most people aren’t affected. With Disruptive innovation, a new product comes along and eventually becomes good enough for the average user. The utility and access leads people to move to the disruptive innovation when it becomes good enough for the average user. With disruptive innovations, the newcomers nearly always win.

So, how can newspapers begin the work on the new innovations, without losing the advantage of the sustaining innovations?

The first illustration is telegraph and then the telephone. Western Union viewed the telephone as having too many short comings to be seriously considered as a means of communications, (from an internal memo, 1876)

He talks about how the innovators often don’t get what their innovations will be used for.

“In the early 1980’s AT&T asked McKinsey to estimate how many cellular phones would be in use in the world at the turn of the century. The consultancy … concluded that the total market would be about 900,000. At the time this persuaded AT&T to pull out of the market.” - The Economist, 1999. Currently 900,000 cell phones are sold every 18 hours.

What connects these innovations? They start with “good enough” on one dimension, but has new benefits like simplicity. It serves “overshot” users. It runs off of a low cost, small business model. It hits a blind spot.

Free dailies provides a good example.

So, what do you do? Identify nonconsumers. Design a ‘first version’ …

In many ways, it boils down to “Some people look at what is and ask why. I prefer to think about what is not, and ask why not”

“The customer doesn’t want to buy a quarter inch drill, they are looking to make a quarter inch hole.”

Focus on the circumstances, not the demographics.

When it comes to news, the problem is solved. People know how to get the news they want. However, when you think about information and connections, it is a wide open frontier.

Update:

Jeff Jarvis says, it sounds like you are talking about trying to change course of a barge by five degrees. Why don’t we just abandon the barge, or blow it up? Stephen talks about how this is run by a newspaper organization, and isn’t something they should be working on.