I blogged here last week about my “big wind/capable team” heuristic for picking startup investments. Today I’d like to go into a bit more detail about the “big wind” part.
A Big Wind is a transformation of a large customer spend from one category to another. It’s almost the same thing as Geoffrey Moore’s idea of a “tornado”, which is a phase in a market when the (relatively) vast Early Majority group decides to adopt a new approach. Moving suddenly from “show me” to “must have”, the Early Majority creates a “tornado” of demand. Examples: the PC “revolution”, networked storage systems, scale-out servers.
Smartphones are in the midst of a tornado-like Big Wind. Sweeping away RIM and Nokia and perhaps Microsoft. Sweeping in Apple and Google.
Maybe tornadoes are the only kind of Big Wind that exists, but in any case, most of the examples I can think of are tornadoes. Maybe the ERP implementation at the end of the last century was a Big Wind without being a tornado. It was driven in large part by Y2K FUD, not by a transformation of the Early Majority to a new approach.
Great example of not a Big Wind: healthcare IT so far. Big market, but no transformation of spend (yet). Right now only early adopters are embracing end-to-end IT for their health businesses. The early majority is hanging back, saying “show me.” It may tip.
Your thoughts?
What are the distinguishing differences between a Big Wind and a Tornado (ala Moore)?
I was trying to get at it in the second-to-last paragraph, but not entirely sure I’ve got it yet.
Possibility #1: There is no difference; they’re synonyms
Possibility #2: A tornado is one kind of Big Wind, and there are others.
People often talk about what you might call “regulation-induced Big Winds”. Prohibition in the US is an example. It was not a tornado (no Early Majority adopting something new) but it did cause a big shift in customer behavior, and brought organized crime to the fore.
A lot of commentators hope for a regulation-induced Big Wind to tip healthcare IT over into mass adoption of electronic medical records. It may happen, but those things seem to get predicted more than they happen.
Maybe there are other kinds of Big Winds as well