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Harvard’s Clayton Christensen is famous for multiple business concepts such as disruptive innovation, jobs to be done and organizing corporate cultures around resources, processes and priorities. But one of his posts has been largely neglected, even if the seminal 2001 article that spawned it also popularized the phrase “Skate where the puck will be”. It is the concept of how cycles of business ecosystem integration and modularity create new market opportunities.

Christensen, who was my mentor for several years, recorded how industries typically begin with an actor integrating an overall solution so that the pioneer reduces dependence on unmotivated or poorly suited partners and tightly controls the interaction of complex components. Only then is the solution good enough for customer acceptance. Over time, this value chain splinters. Specialists with focused skills and efficiency come to master certain aspects of an industry. Christensen, for example, showed how this happened in computer engineering, where the industry began with giants like IBM producing their own processors, memories, operating systems and much more to later specialize in companies like Intel, Micron and Microsoft. This process also takes place in less technical areas.

It follows that market pioneers have to create complete solutions for customers around the really new and distinctive parts of their offerings – for example, IBM did not have to manufacture its own boxes. Additionally, the pioneers often need to be deeply involved in selling the new offering and ensuring that customers use it well to record their success in order to then drive greater mass adoption. There may be partners involved in some links in the value chain, such as finding first-time customers, but the company that is creating the big innovation needs to remain closely involved throughout the sales cycle.

In my book, Capturing New Markets, I called these sales strategies “country roads”. They can be winding and lonely, but the driver has a lot of flexibility in choosing the route. This is in contrast to sold “superhighways”, which lead to established destinations, transport many fellow travelers and have a supporting infrastructure (rest stops, petrol stations) that make driving these routes easy – as long as you are on the way where this motorway leads.

Magic Leap has faced such a moment with its revolutionary technology. The company is a pioneer in augmented reality, which uses a 3D head-mounted display to overlay virtual data in real-world environments. Magic Leap is trying to bring this technology to surgery, among other things, so doctors can see biometric and imaging data about a surgical site while looking directly at the patient. This suggestion can be very useful in disciplines like neurosurgery, for example, when the operation needs to reach a well-defined location and does not need to disrupt other critical anatomies.

For Magic Leap, the head-mounted display is not enough to be successful. It has to connect the hardware to the surgical planning software to create a complete technical solution, then it has to conduct clinical studies to demonstrate its suitability for use, and it has to find early adopters and ensure their success so that others can then move their hospitals to the systems take over this. None of this is easy, but that’s how new markets typically emerge.

This is the plan the company has followed and only partnered with when needed. Brainlab, for example, produces software for neurosurgery planning and has established customers; that’s not the signature part of Magic Leap’s solution, and it would be prohibitive for the company to develop these assets itself.

Jennifer Esposito, who leads Magic Leap’s medical business, told me, “A large part of our job is educating the industry and the ecosystem about what technology can do. Then we enable the established players in the ecosystem to take it over. My team is available to work hand in hand to bring these companies up to speed. It is also important for us to have a closed feedback loop and to incorporate this into the product development cycle. “

This work creates high barriers against rivals entering a space pioneered by an early pioneer like Magic Leap. It’s also costly and time consuming, a consideration that many startups belittle too much. Ultimately, the value chains of industry can also be fragmented in complex systems, but by then the dynamism of the establishment of the industry has created market leadership and economies of scale that can support the successful pioneer. IBM is no longer a fully integrated computing company, but it’s still quite a force to be reckoned with.

There is a saying in business that “pioneers are those with arrows in their backs”. Once in a while. When a value chain is fragmented, focused competitors can step in later and use all the market development work of the early movers. But if it stays at least reasonably integrated, that’s quite a challenge. In the case of Magic Leap, it’s hard to imagine how the maker of the augmented reality system could easily be pushed aside later, even though they may develop more ecosystem partners over time. There will be too many dependencies for that.

When trying to get an industry going, think about Magic Leap’s approach. Not many companies will be able to follow in your footsteps, and if you get down the highway early, you’ll beat rivals who travel on freeways that are not nearly as fast as they look like.

Contribution to Branding Strategy Insider by Steve Wunker, author of JOBS TO BE DONE: A Roadmap for Customer-Centered Innovation

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