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Step 6: Experiment and Evolve Catalysts should be nimble enough to plan for long-term growth and be ready to adapt to changing environments. Catalysts need to recognize when they need to lead--and when being a follower is advantageous. They need to grow deliberately, experimenting and evolving their prices, products, and services. Even once they are established, a smart catalyst knows how to watch for competitive threats and anticipate what is next in the marketplace.
» For more on experimenting and evolving, visit Chapter 8.
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TiVo exemplifies the challenges that catalysts face. TiVo realized early on that it had a platform that not only could eliminate distracting television advertisements but could provide alternative advertisements that would be of more value to both viewers and advertisers. As it developed its base of users, TiVo started inserting advertisements that viewers could select if they were interested. TiVo saw its future as a two-sided business that would earn revenues from both advertisers and viewers. But while many view its technology as superior to that of its rival cable- and satellite-television providers, TiVo has yet to earn a profit. It has more than 4.4 million subscribers, but that is less than 4 percent of American households and growth has slowed. TiVo is at a cusp where its catalytic reaction will either take off or fizzle. It is actively working on expanding its software technology so that people can control their recordings with their mobile phones. And it is well-positioned to attract advertisers that are looking for television viewers who want to watch their advertisements and are therefore likely to buy. It is also trying to make its services more attractive to users by forming partnerships with industry leaders such as Amazon and making deals with cable-TV carriers such as Comcast and Cox to distribute TiVo to cable subscribers. Whether TiVo can attract a critical mass of advertisers and viewers over the long term remains to be seen.
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