Part 3 | Navigating the Cutting Edge: Investing in Specialized Innovation, Quadrant 2 – White Elephants 

Progress demands pushing boundaries with pioneering innovations to redefine what’s possible. But not every bleeding-edge capability warrants immediate investment. At least not before evaluating the cost and performance viability for widespread adoption. Still, certain specialized use cases justify the premiums commanded by exclusive emerging technologies. We’re exploring each quadrant in the cost and capability matrix. Let’s take a deeper look into quadrant 2. 

Did you miss the rest of the series?

Part 1 Intro to the Cost Capability Matrix
Part 2 | Assessing the Cost-Capability Tradeoff, Quadrant 1 – Consumables

Insights into White Elephants 

Quadrant 2 contains these complex customized solutions with astronomical price tags and limited flexibility catering to niche, specific applications. These systems occupy critical spaces demanding extensive tailoring, exotic components, and top-tier performance. Think about microprocessors powering high-performance computing, highly customized cybersecurity defenses fortifying infrastructure, or proprietary aerospace and defense technologies securing strategic capabilities.  

The innovators and early adopters drawn to these offerings willingly trade off higher expenses and rigid designs for unmatched capabilities meeting unique constraints. By nature, the limited scale of these specialized innovations prevents cost efficiencies and flexibility afforded more commoditized mainstream solutions. But the flipside offers opportunities to pursue mind-bending breakthroughs in materials, processes, and performance unencumbered by commercial viability constraints. 

Practical Application  

Navigating this rarefied innovation airspace dominated by high-risk technological frontiers and uncertainty requires savvy leadership. Three essential guiding principles apply when engaging and evaluating with cutting-edge solutions before their benefits trickle down to wider audiences: 

  • Laser Focus on Critical Priorities: Not every nice-to-have capability warrants riding the bleeding edge, given the big bills and decision paralysis. Leaders must ground innovation priorities in strategic necessity and unique organizational requirements before pursuing exotic alternatives.  
  • Embrace Iterative Agility: Rigorous yet nimble road mapping reduces risks of backing ultimately outdated designs. Prioritize modular architectures, iterative testing and flexible requirements that sustain competitiveness through ongoing evolution vs wholesale rip-and-replace upgrades.   
  • Forge Tight Feedback Loops: User-centric co-design and collaboration with developers is essential to maximize bespoke solutions’ real-world value and application. Rapid user testing surfaces vital insights on utility while targeting must-have use cases.   

Plotting an organization’s existing specialized innovations on the cost-capability matrix reveals how many complex custom solutions fail to demonstrate strategic alignment or strong value realization compared to more mainstream commodities. By analyzing the niche innovations portfolio through the lens of Quadrant 2, leaders gain sobering visibility into expensive, over-designed systems bordering on extravagance more than necessity. This introspection highlights opportunities to scale back custom projects losing steam to prioritize resources for capabilities demonstrating clearer enterprise payoffs. Taking an inventory of specialized innovations against the matrix provides a much-needed perspective on the sustainability and strategic importance of boutique bills threatening to breach acceptable risk thresholds. 

 Questions a leader should consider: 

  • Do our organization’s specialized niche innovations directly address clearly defined strategic priorities and constraints, or are they more speculative “nice-to-haves”? 
  • Have the custom solutions reliably demonstrated sufficient real-world performance improvements over mainstream alternatives to justify 2-3x costs? 
  • What level of adoption and utilization have our bespoke innovations seen since deployment? How might we improve outcomes? 
  • Can any modular components be extracted from existing niche innovations for reuse in other solutions pursuing standardization and scale? 
  • Would pursuit of more open, flexible architectures reduce switching costs and allow our specialized capabilities to remain competitively refreshed? 
  • Can we meaningfully forecast total lifetime costs for supporting, upgrading, and maintaining highly customized innovations with unpredictable change over time? 
  • At what threshold of expense, delayed delivery, requirements creep, or opportunity costs should we reevaluate continuing investment in specialized niches vs pivoting resources to higher-value activities?   
  • Beyond narrow niches, do we have mature processes for responsibly mainstreaming or sunsetting specialized innovations if use cases evolve or fail to materialize? 

Asking these difficult questions allows leaders to critically examine custom innovations to ensure investments stay strategically aligned and deliver tenable value to the organization’s needs. Ongoing scrutiny combats inertia or emotional attachments that cause niche solutions to bloat budgets. 

Specialized innovation occupies a crucial yet often misunderstood niche, balancing present constraints against future ambitions. Though exotic and expensive, the apex solutions produced by unrelenting builder-user focus make the high costs and narrow flexibility worthwhile for the few organizations requiring their unmatched benefits. With disciplined strategies balancing investments in bespoke innovations against commoditized alternatives, leaders can judiciously support pioneering development while ensuring affordable access to new capabilities at the opportune moment for their unique needs. In the next article, we’ll look into the ideal space, high value, where we have low cost and high capability. 

Highlight Receives Direct-to-Phase II SBIR Grant to support the United States Air Force Research Laboratory and AFWERX

Fairfax, VA – Highlight announces it has been selected by AFWERX for a SBIR Direct-to-Phase II contract in the amount of over $1 million dollars focused on developing the pilot program for access to applications and data on mobile devices at the Controlled Unclassified Information (CUI) level to address the most pressing challenges in the Department of the Air Force (DAF). The Air Force Research Laboratory and AFWERX have partnered to streamline the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) process by accelerating the small business experience through faster proposal to award timelines, changing the pool of potential applicants by expanding opportunities to small business and eliminating bureaucratic overhead by continually implementing process improvement changes in contract execution. The DAF began offering the Open Topic SBIR/STTR program in 2018, which expanded the range of innovations the DAF funded. As of February 10th, Highlight has started its journey to create and provide innovative capabilities that will strengthen the national defense of the United States of America.

“We are very excited to continue our work with the US Air Force and our partner Hypori, providing solutions that remove digital obstacles from our warfighters. We look forward to extending the lessons learned from the successful BYOD pilot within the US Army Airmen with easier access to their networks, data, and applications,” said Kevin Long, Vice President of Highlight’s National Security Solutions group.

“The views expressed are those of the author and do not necessarily reflect the official policy or position of the Department of the Air Force, the Department of Defense, or the U.S. government.”

About Highlight

Highlight Technologies (“Highlight”) is an award-winning, 100% employee-owned Application Development, Business & Mission Operations, Data and Analytics, Hybrid Cloud and Automation, Cybersecurity, and IT Services to over 20 U.S. federal government customers. Our customers include National Security (DHS, Army, Air Force), Health (NIH, HHS), and Citizen Services (SBA, USAID,

About AFRL
The Air Force Research Laboratory is the primary scientific research and development center for the Department of the Air Force. AFRL plays an integral role in leading the discovery, development, and integration of affordable warfighting technologies for our air, space and cyberspace force. With a workforce of more than 12,500 across nine technology areas and 40 other operations across the globe, AFRL provides a diverse portfolio of science and technology ranging from fundamental to advanced research and technology development. For more information, visit

As the innovation arm of the DAF and a directorate within the Air Force Research Laboratory, AFWERX brings cutting-edge American ingenuity from small businesses and start-ups to address the most pressing challenges of the DAF. AFWERX employs approximately 370 military, civilian and contractor personnel at five hubs and sites executing an annual $1.4 billion budget. Since 2019, AFWERX has executed 6,028 new contracts worth more than $4 billion to strengthen the U.S. defense industrial base and drive faster technology transition to operational capability. For more information, visit:  

Part 2 | Assessing the Cost-Capability Tradeoff, Quadrant 1 – Consumables 

Decision-makers face tough cost-capability dilemmas whenever charting strategic plans or evaluating investments. Whether debating budget allocations, analyzing procurement choices, or guiding technology adoption, leaders constantly balance fiscal prudence against pursuing advanced functionalities.

Did you miss part 1 of this series?

Read it here: Part 1 Intro to the Cost Capability Matrix

On one hand, sticking to bare essentials and proven offerings seems safest given constraints around taxpayer dollars, shareholder responsibilities or operating budgets. However, declining to invest in cutting-edge innovations risks ceding strategic advantages to those embracing new paradigms and capabilities. Such tradeoff analyses typically rely more on subjectivity than objectivity. 

In decision-making processes, the challenge lies in balancing value and outcomes while avoiding excessive complexity, expenditure, or stretching beyond means. It is common for organizations to mistakenly associate affordability with a lack of progress or compromise in performance. However, not every investment requires cutting-edge capabilities. Mature solutions, adapted for scalability, can address immediate challenges while freeing up resources for high-risk, high-reward endeavors in the future. 


Insights into Consumables 

Quadrant 1 of the cost-capability matrix focuses on “consumables” – innovations optimized to deliver essential, affordable value rather than peak performance. These solutions cater to the pragmatic majority who prioritize price and necessity over prestige. Examples include reliable procurement vehicles, efficient mobile banking apps, and simple social platforms. This approach reflects a return to basics. 

What distinguishes consumables is their emphasis on scalability and simplicity rather than specifications and customization. By maximizing production volume and streamlining features, consumables achieve low per unit costs, making them accessible to the mass market. Although they may not be attention-grabbing, consumables’ stripped-down approach and efficient operations fulfill their purpose: providing foundational capabilities to the mainstream at the lowest viable price point. 

However, the notion of compromise is gradually losing relevance even in the low-cost consumables market. A new wave of ambitious startups now integrates surprisingly robust features into everyday products that were previously limited to meeting essential needs. For instance, robot vacuum cleaners now incorporate clever lidar sensors, budget smartphones run capable machine learning algorithms, and affordable headsets offer remarkably immersive virtual reality experiences. The line between premium and budget offerings is becoming increasingly blurry. 

This democratization of once high-end technology to mass market consumables presents tremendous opportunities, but it also raises the level of competition. Both established industry leaders and disruptive newcomers realize that a significant portion of their potential market seeks to fulfill basic requirements at affordable prices. By catering to this segment, they gain early access to customers in the adoption lifecycle, cultivating loyalty and increasing lifetime value. 

Therefore, consumables deserve just as much innovation, iteration, and investment as their more sophisticated counterparts. Proper positioning of consumables requires insight and vision, as the capabilities they offer become the baselines that end users come to expect as standard. Underestimating this segment by equating affordability with a lack of progress risks losing significant portions of the market to new entrants that provide unexpected value at disruptively low prices. 

Practical Application  

Leaders can harness Quadrant 1’s lens to identify capability gaps in existing consumable solutions aligned to basic organizational needs. Plotting current offerings on the cost-capability matrix quickly reveals commoditized areas demanding new attention amidst accelerating innovation cycles. Legacy systems residing in once-stable basic necessity niches now face disruption by scrappy entrants bundling advanced functionalities at radically low-price points. By analyzing the organizational consumables portfolio through the matrix, leaders gain urgency to re-examine lagging solutions against modern marketplace alternatives and user expectations in order to recapture neglected value chains before disruptors dominate commodity spaces ceded due to dated assumptions. 

Questions a leader should consider: 

  • Are the basic, commoditized solutions in our organization still delivering the affordable value the Consumables quadrant seeks? Or could they be improved to better align with end-user needs and modern alternatives? 
  • What lower-cost stripped-down options available in the marketplace could offer similar base capabilities to replace any costly legacy consumables in our portfolio? 
  • How can we leverage economies of scale for these essential capabilities by consolidating contracts/vendors, increasing standardization, or improving production throughput? 
  • What underlying technologies, integrations, or processes could we enhance in our consumables to keep pace with competitors bundling advanced features into low-cost offerings? 
  • Do we have sufficient bench strength, partnerships, or in-house expertise across the organization’s various consumables to respond quickly if disrupted by cheaper or higher-value replacements? 
  • How frequently are we refreshing requirements and exploring alternative consumables relative to the pace of innovation in a given capability area? Are user needs and solution assumptions still aligned? 
  • What change management investments – organizational process changes, training, etc. – would be necessary if pivoting to faster cycle times and upgrades for our essential commodity solutions? 
  • Are capabilities in any supporting consumables limiting the potential usefulness or adoption ceiling of more advanced solutions my organization offers?  

Asking these tough questions allows leaders to proactively address potential capability gaps, disruption risks, slower upgrade cycles, and feature creep even in basic consumable building blocks many institutions take for granted. 

In the race to capture emerging value chains, the gloves are clearly off when it comes to consumables. Forget glossy packaging or prestige pricing – the goods hiding in plain sight often end up underpinning household brands. Behind the modest exterior lie immense possibilities for those clever enough to unlock consumables’ full potential. We’ll continue our analysis of each quadrant, looking into Quadrant 2: White Elephants next.  

Highlight Establishes Innovation Lab, EDGEWERX 

Highlight is proud to announce the launch of its new innovation lab – EdgeWerx – dedicated to conducting research and development projects aimed at solving problems and creating groundbreaking solutions. EdgeWerx will focus on empowering warfighters, civil servants, and citizens with an edge to excel in their respective sectors. 
“For the past 15 years, Highlight has provided custom technical solutions to our customers,” said Highlight CEO Aarish Gokaldas, “and the establishment of EdgeWerx renews our commitment to not only develop robust solutions for our clients but also extend those solutions to serve the greater Government.” 

The foundation for EdgeWerx draws from Highlight’s expertise in working side-by-side with government stakeholders to inform the best solutions. This tight collaboration has yielded impactful solutions to advance their missions and deliver even more exceptional products and services. 

EdgeWerx provides streamlined, cost-effective ways for Highlight to solve complex problems. Our partnerships apply open source, infrastructure as code, artificial general intelligence, and other cutting-edge technologies and techniques to mature ideas into demonstrable software solutions. 

“EdgeWerx fosters an invigorating collaborative climate where our gifted experts can try out their concepts and construct pioneering solutions for our existing and future clients at the edge of innovation. I look forward to helping enable and steer innovation for our clientele and workforce, with the capacity to push the boundaries of innovative and fascinating solutions.” said James ‘Jim’ Eselgroth, Highlight’s Director of Technology and Innovation.  

To learn more about EdgeWerx:  

About Highlight: 

Highlight Technologies (“Highlight”) is an award-winning, 100% employee-owned, ISO® 9001, ISO 20000, ISO 27001, ISO 44001 certified, ISO 56000 certified, CMMI-DEV Level 3, and CMMI-SVC Level 3 appraised federal contractor that provides Application Development, Business & Mission Operations, Data and Analytics, Hybrid Cloud and Automation, Cybersecurity, and IT Services.  We support over 20 U.S. federal government customers  customers including National Security (DHS, Army, Air Force), Health ( ACF, NIH, HHS) and Citizen Services (SBA, GSA, USAID). For more information, please visit  

Part 1 | Beyond the Price Tag: Unlocking the Strategic Power of Cost-Capability Tradeoffs

Have you ever presented an idea to leadership for them to say it’s too expensive? In a capitalist society, it makes sense; after all, organizational dollars are precious and essential. In the public sector, it makes sense as government officials act as stewards of taxpayer dollars. But looking at the cost alone is a pitfall. I can recall numerous pitches where the decision maker’s perception was focused solely on the price tag being too high. What if we help innovative idea generators show the relationship between cost and impact? What if we helped the organizational culture transform to ask questions like, what will the impact be? If the short-term investment improves both the long-term strategy and budget, shouldn’t we at least hear them out?

So how do we show the cost and impact? Let’s look at the cost and capability matrix. On the y-axis, Cost represents the total lifecycle cost per individual unit. On the x-axis, Capability, can be measured in different ways depending on what you provide. For instance, the capability could be less diverse or more diverse. Like a simple Swiss Army knife on the less side compared to a robust Swiss Army knife with many tools on the more side.

Before we go down the rabbit hole of use cases, let’s talk about each quadrant and their relationship to common methodologies like Moore’s Adoption Curve[1], Wardley Mapping[2], or Disruption Risk Matrix[3]. Why do these methodologies matter? Understanding the relationship between the matrix and these methodologies will help you understand the types of people or adopters you’re interacting with. They allow you to (1) understand the changes necessary to implement, (2) build your investment strategy, or (3) manage your existing portfolio of investments.

Quadrant 1, Consumables: Low Cost/Low Capability, represents low-cost, high-volume products and services focused on simply getting the job done. They lack customization but appeal to the pragmatic seeking affordable options to meet basic needs. This is akin to Efficient Commuter vehicles: Where affordability meets practicality, the compact car acting as daily workhorses for those focused on utility and stretching every dollar. On the innovation curve, these solutions cater to wide adoption once easily accessible and reliable; on a Wardley Map, they fill simple niches as a commodity but may face declining relevance over time.

In Quadrant 2, White Elephants: High Cost/Low Capability, hosts expensive and specialized solutions catering to limited but crucial applications; these innovations service high-priority needs for specialized adopters willing to tolerate higher costs and lower flexibility in exchange for tailored capabilities. This quadrant is akin to Bespoke Marvel vehicles: Crafted with meticulous attention, these high-cost marvels redefine automotive sophistication, appealing to those who appreciate the extraordinary. Though broader mainstream adoption may be unlikely, these innovations occupy critical niches, providing highly designed systems for use cases demanding extensively customized or state-of-the-art functionalities appropriate for particular vanguard early adopters.

Moving along the bottom, Quadrant 3, High Value: Low Cost/High Capability, contains flexible, customizable solutions catering to early adopters craving new capabilities; these commoditized products provide mass-market options at affordable levels for the moderately risk-tolerant majority. This quadrant resembles “Innovations for All”: High-Value vehicles bring advanced features within reach, catering to those eager for cutting-edge capabilities without breaking the bank. On the innovation curve, early adopters flock to these innovative offerings as their prices become accessible.

Finally, Quadrant 4, High demand/low-density Workhorses: High Cost/High Capability, provides specialized, customized solutions for those willing to tolerate high costs and risks for advanced capabilities tailored to their needs; though expensive due to few units and economies of scope, these custom-built innovations cater to unaddressed niches. This quadrant is akin to Trailblazing Titans: High-density workhorses, where high costs fuel groundbreaking innovations. On the innovation curve, risk-taking innovators fuel this high-risk, high-reward quadrant focused on groundbreaking inventions, while on a Wardley map, the emphasis is genesis and custom solutions stretching capabilities beyond current commoditized offers.

From budget constraints to battlefield decisions, striking the right balance between cost and capability is a constant challenge for leaders across government, military, and business spheres. We’ve overviewed how this framework offers leaders advanced tradeoff analysis. By mapping solutions against the matrix, organizations gain critical visibility into portfolios spanning maturity levels, adoption risks, capability outcomes, and adjacent possibilities – profoundly empowering objective, data-driven choices optimizing limited resources. Now we turn to explore each quadrant in greater depth, starting with the mature, economical offerings in Quadrant 1: highlighting real-world applications of the matrix for navigating constant tensions between costs, performance, and strategic alignment. When applied with rigor and vision, this model acts as a true compass guiding organizations to compound capabilities and savings over time.

[1] Geoffrey Moore’s Innovation Adoption Curve categorizes the process of new product or technology adoption into five segments: Innovators (2.5%), Early Adopters (13.5%), Early Majority(34%), Late Majority (34%), and Laggards (16%). This model assists businesses in understanding the market dynamics and adapting strategies for each segment, emphasizing the challenge of crossing the “chasm” between early adopters and the early majority. Learn more here:

[2] Imagine a map of innovation where capabilities evolve like landscapes. Wardley Mapping charts their progress, from basic needs (consumables) to groundbreaking concepts (genesys), helping leaders navigate complex environments, prioritize investments, and fuel future growth. Learn more here:

[3] A disruption risk matrix maps potential threats based on their impact and likelihood. High-impact, high-probability disruptors demand immediate attention, driving proactive strategies and shaping future-proof business plans. This dynamic tool helps navigate volatility and stay ahead of the curve. Think of it like a two-axis chart:

  • Axis 1: Disruption Impact: This measures the potential severity of the disruption. High impact disruptions could completely upend your business model, while low impact ones might only cause temporary hiccups.
  • Axis 2: Disruption Likelihood: This gauges the probability of the disruption actually happening. High-likelihood threats demand immediate attention, while low-likelihood ones might be monitored but not prioritized.