[MUSIC] So, are all the demands or the market size or any particular products as simple to estimate, you may say, as this one even though clearly is not a simple exercise? Well, it turns out that not necessarily. Let's look at how would you go about estimating the amount for highly innovative products. Think about when Ford launched the first automobile in the North American market. He became famous for having said, if I had ask customers they would have requested that I build faster horses. Right? So it's very difficult to ask customers for a product that they don't even remotely what is look? What it is? What is like? And what it will be use for? Right. It's very, very hard to estimate the demand or even the willingness to pay for such innovative product. We have looked at things like this before in the previous week. Do you recall the case of loom? This mini space ship that would transport 30 to 45 kilometers above the Earth to be able to have those beautiful views of our blue planet. What is the demand for this product? As you can see, is very hard to estimate. So part of the problem with new radical innovations is that customers cannot conceive of what the experience or the product will look like, what will they be using for. And hence, it's very, very difficult to imagine what will be their willingness to pay. But you can certainly narrow down some of the uncertainty as we one might think about, you may have, for example try to attempt to survey high net worth individuals and what would be their willingness to pay for unique experiences, like such as going to see, where the Titanic for example has sunk into the bottom of the Atlantic. Alternatively, you could have gone around to ask some of the fancy or the specialized distribution for some of these experiences to try. To give you some kind of an expertise in judgement as to whether this experience will sell. How easy will it be to sell it. How do you need to communicate? And furthermore, what might be people's approximate willingness to pay for this level of an experience. So in addition to customers not understanding what is the product case or what would be the willingness to pay for and new innovative radical product for experience, Steve Jobs once told us that there is another complication and that is their customer preferences are not stable. Which means that if I were to ask you one day, what do you request of a particular product such in a smartphone, you will tell me an x amount of features and apps and so forth, but if I were to ask you tomorrow, you might be able to tell me a different set of answers. So, preferences are unknown for innovative products and, in addition, typically, they are unstable. So how will you have estimated the demand for its next blockbuster product after the iPod? The iPad. So does it mean that you could not have estimated the demand for an iPad? Well, you still would have gone through some kind of an exercise. You would have seen the level of penetrations of PC's in the world and to see who has adopted or who has adopted the PC, what the adoption curve for the PC was. And also you may have looked at the level of adoption for smart phones, right? Which they had been already running for a few years by the time it was been introduced. Somewhere between that range, it will give you what's the possible potential for this new product, what's the level of adoption, and then compare it to other innovative new categories of products that finally found some success in the market to try to determine how to ramp up the production of these new devices. [MUSIC]
