The Killer App

Larry Downes and Chunka Mui published their book 'Unleashing the Killer App' in 1998. A killer app is defined is one that is "a new good or service, that established an entirely new category and, by being first, dominates it, returning several hundred percent on the initial investment... Killer apps are the Holy Grail of technology investors, the stuff of which silicon dreams are made."

Most killer apps in the modern world are digital in nature, for example the mobile phone and the Internet. Another example is the CD-ROM, which in the mid-1990s led to the rapid demise of paper-based encyclopaedias such as Britannica. The authors believe in a 'digital strategy' that involves replacing the traditional top-down, analytical approach to commerce with one based on 'inventing the future' and looking no more than 18 months into the future: strategy is real-time and dynamic. They list 12 principles for survival in this world including:

Reshape the Landscape:

• Outsource to the customer: provide an interface that allows the customer to navigate your data and customise it, e.g. book reviews in Amazon.
• Cannibalise markets: for example, provide free on-line versions of newspapers and magazines that create new opportunities for marketing.
• Treat each customer as a market segment of one: mass customisation, it's so easy for customers to go elsewhere and correspondingly hard to hang on to them.
• Create communities of value: nurture relationships with and between customers, help customers to identify with the community.

Build New Connections:

• Replace rude interfaces with learning interfaces
• Ensure continuity for the customer, not yourself: don't change interfaces to suit yourself.
• Give away as much information as you can: the age of closed information systems is over, people expect to be informed.
• Structure every transaction as a joint venture: larger organisations need to learn how to deal with a new breed of virtual companies (this may include paying them!)

Redefine the Interior

• Treat assets as liabilities: for example, a sales force, a car fleet, a chain of shops
• Destroy your value chain before your competitors do, for example intermediaries
• Manage innovation as a portfolio of options
• Hire the children: incorporate their values, energy and mindset

Summary based on 'Writing The New Economy' by John Middleton (Capstone, 2000).

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