Rule of the fourth stage: why some novelties are unprofitable?
Really - why only a few percent of all novelties are presently successful in the market? Experts carried out the analysis of a large number of especially successful goods. It turned out that all goods develop cycles.
Each cycle consists of four stages. Each subsequent stage qualitatively surpasses previous. Four stages of one cycle are covered by the same “working principle“.
For example, for the bicycle within the working principle “The vehicle set in motion by both legs of the person“ 4 stages are known:
1. Two wheels established on one frame. The person sits on a frame and makes a start from the earth directly legs.
2. The bicycle at which the forward wheel is much larger than back and it is supplied with pedals. Such bicycles can be seen on ancient engravings now. Radius of rotation of pedals several times is less than the radius of forward wheel. Speed of the movement of the bicycle is much higher than the speed of the movement of legs of the cyclist.
3. The bicycle with chain transfer to a driving wheel.
4. The obgonny coupling is added. The driving wheel can freely rotate at motionless pedals. The bicycle turned into Xi Ale.
After that there was no new commercially successful stage of the bicycle. But there was an expression “to invent the bicycle“, making sense “to be engaged in obviously unpromising business“. People intuitively felt that they for any else unknown reasons to further improve the bicycle are not necessary: the novelty can turn out amusing, but it will not be widely adopted and, respectively, will not make profit.
This fact can serve as bright confirmation that each object of human activity within one working principle has only four stages of development. The fifth stage cannot be commercially successful.
Generalizing, it is possible to formulate the following Rule of the fourth stage (further “Rule“):
Within the same working principle the fourth stage of development of goods represents Xi Ale and is most successful in the market, and the fifth stage does not make profit. After the fourth stage the goods should be developed within the new working principle.
It is the Rule explains why many promising novelties do not make profit (sometimes even at powerful advertizing): perhaps, they represent the fifth stage within the old working principle.
On the other hand when the goods passed only three stages of development, the Rule can be used as a beacon for finding of such new niches in which novelties will be successful.
Here is how it can look in practice.
Until recently and within the working principle of “The device for awakening of people“ only alarm clocks of the following stages were known:
1. In Ancient China the alarm clock in the form of a candle in which certain places metal balls were suspended was known. At combustion of a candle they fell in a porcelain vase, publishing a loud ring. Pay attention: such alarm clock - disposable.
2. Usual mechanical alarm clock. This device reusable. To use it once again, rather simply repeatedly to get a spring.
3. Electronic alarm clock. He does not need to be brought every evening. It can be programmed once so that it awoke the person every morning at the same time.
In these conditions the Rule predicts a possibility of creation of commercially successful alarm clock of the fourth stage (by addition of a simple element to an electronic alarm clock).
Such alarm clock was offered in 1989 (the invention of the USSR to No. 1471171). Added the sensor watching fast and slow phases of a dream to the known electronic alarm clock. It allowed to give the awaking signal in the most optimum for awakening of this person a timepoint. As a result there was an opportunity to sleep less, and better to get enough sleep. As you can see, the usual electronic alarm clock turned into Xi Ale. Now the mobile application which basis this idea is heads a top of sales in many countries.
Using the Rule similarly, it is possible to find new perspective niches and for other goods.
It is interesting that this Rule is applicable not only to goods.
Striking example: four stages of development of human society are in the history known: primitive, slaveholding, feudal and capitalist. In 1917 an attempt to create the fifth stage was made. In the USSR it failed in 1991.
In recent years China develops very violently. Perhaps, because in 2004 the amendment to the Constitution allowing a private property was adopted there (in fact canceling socialism)?