How to avoid mayfly innovation

Did you know that most species of mayfly survive for only one day? One genus, the dolania americana, lasts just five minutes. This is only marginally shorter than the lifespan of the proposed European Super League, which collapsed dramatically this week. To recap, twelve top European clubs, including six from England, agreed to form their own break away league. The venture was underwritten by JP Morgan to the tune of £3bn. The absence of any prospect of relegation guaranteed participants huge, sustainable revenues, regardless of sporting performance. No wonder their share prices rose up to 20% when the news broke. Years in the making, the venture was anchored by 23-year contracts that had already been signed.

Yet within three days it was dead. The six English clubs were forced to withdraw in the face of outrage from not just everyone not associated with the new Super League, but also their own fans. (Perhaps it was the thought of having to play Arsenal more?)

Some commentators have suggested the proposal was all a ruse to secure a better share of revenues in the forthcoming revamp of the UEFA Champions League. This is unlikely. The clubs have suffered reputational damage, which is significant when you are selling a global brand. Ed Woodward, the Manchester United Executive Chairman and one of the principal Super League architects, has resigned a year earlier than planned. The clubs will probably have to pay penalties for breaking their contracts. The owners have mobilised their own fans against them. They can expect to face new pressure, with Government exploring options for an independent football regulator and compulsory fan ownership. By any measure, it is a fiasco for the ‘big six’.

What went wrong, and what can founders learn from it?

There are many factors we can point to. We have written before about the value of conducting a pre-mortem to test your assumptions. There was some scrutiny, especially within JP Morgan, where a risk committee had to gauge likely reactions to the deal. Not enough was done or done well. Clearly the launch and promotion were a shambles. To appear tone deaf and be branded greedy mercenaries exploiting the game is an epic comms fail. The timing was also terrible. As European countries struggle to recover from the shock of covid, the last thing they want is to see is high finance abducting their beloved sporting institutions.

But it is most instructive to examine the abortive Super League through the lens of product innovation. It was, after all, an innovation that failed. Not only was it a novel league format (new opposition, no promotion or relegation), they were also exploring new game formats. Florentino Pérez, the ex-Real Madrid executive and Chairman of the Super League, was at pains to point out that 40% of people don’t actually like football in its current form. Too many younger consumers are unengaged, preferring screen time to scream time on the terraces. Something has to be done about this, such as shortening the games. Other sports, most noticeably golf and cricket, face similar conundrums. Their governing bodies are exploring ways of modernising and reinventing to acquire new relevance without upsetting traditionalists.

So the first failure was in customer discovery. The Super League innovators failed to understand the needs and desires of their target audience, their fans. This may be because they were focused on meeting the needs of other stakeholders, such as club owners and shareholders, media broadcasters and big brand advertisers. But as important as these audiences are, they are all entirely beholden to the fans. Not because of the passion fans have for football traditions, but because they buy things. Like replica kits, match day tickets, pies and pints, sky football subscriptions, and all the things advertisers like to promote in the ad breaks. Fans are powerful because they are consumers, and there was clearly no wish for them to consume Super League football.

The second failure was to forget that innovation does not occur within a vacuum. Perhaps the Super League innovators did ask fans what they would think of Man United playing Juventus every season. Maybe the fans said this would be great. But were the wider implications explained? The Super League is a highly disruptive innovation. Had it progressed, it would have immediately de-valued the Champions League, made the Europa League irrelevant, and changed the dynamics within the domestic leagues. Assuming the six English Super League members were still allowed to compete in the Premier League, the competition for European places would be completely altered (as having no value to them and being less valuable to others). They would also have had vast additional wealth to strengthen their squads, making the league both uncompetitive and less attractive to fans. At a stroke it would have changed football as we know and love it.

Which brings us to the bigger question: how can you avoid making the same mistakes in your business? Studies show that between 80-90% of all innovations fail. Even the presence of innovation labs has failed to improve this dire statistic. Innovation will always be hard. But it is not impossible. It just needs to be planned better.

One very interesting book you should be aware of is The Wider Lens, by Ron Adner. Timing has always been seen to be a vital success factor for any new business. But that doesn’t mean you have to be first. Most first movers fail. You have to get the timing right. Adner says the way to do this is by examining the underlying ecosystem that you are launching into. It is the ecosystem that will determine success by dictating how receptive players and consumers are to your new technology, and how long old technology can endure. Both are equally important. If the ecosystem is not ready, you have to wait until it is. And if it is ready, you have to be realistic about how your shiny new thing will co-exist against not just incumbent, inferior technologies, but also how these will improve in response to your innovation.

Innovation is dynamic. Opportunities are everywhere, but you don’t have total control over them. They can be reshaped, shrunk and delayed by both competitor responses and ecosystem changes. Old technology has a nasty habit of proving resilient. So to be successful, a business or product launch must take into account not just the internal case (why you think it is great), but also the external (the ecosystem and how it is changing), and the competitive case (how others will evolve in response to you). It feels odd thinking about competitors might innovate, but it will help you to understand what the path to adoption for your enterprise is likely to be (and perhaps give you ideas on how to counter any thrust).

Will we ever have a European Super League? Perhaps. But we won’t have one for a long time because the entire football, media and brand ecosystem is currently aligned against it. What one group of football experts thought would be a popular, necessary evolution, has been exposed as being toxic to everyone else. The outcome was mayfly innovation, dead within a week. Make your lens as wide as possible to avoid the same fate.