A minute ago, the Nook was an overpriced book reader from a traditional bookseller being beaten by its web-driven competitor that was late to the market anyway.

Now, it’s a very attractive, cost-effective Android tablet – and did you know you could download all of Barnes & Noble’s books on it, too?

From niche player in the narrowly confined electronic book reader world to new entrant and potential giant killer in tablets, all in one serendipitous swoop. Why serendipitous? Because the hack that uncovered the rooting capability in the tablet was never on the drawing board. It was first reported weeks after the color Nook first shipped in November of last year. Unnamed sources (really, I have unnamed sources) quickly said, “No comment.”

But the right decision – a damn interesting decision, too – was made to embrace the Pandora’s Box of possibilities that the new functionality could unleash. This changes Barnes & Noble from a bookseller to a consumer electronics brand in the blink of an OS update.

In Killing Giants: 10 Strategies to Topple the Goliath In Your Industry (available at Barnes & Noble, as well as Amazon, 800 CEO READ and elsewhere), I interviewed a similar business with a similar problem – Vibram, makers of the Five Fingers athletic shoe. Faced with increasing commoditization and the loss of their core OEM shoe sole business, they were looking for ways to breathe new innovation into the stamping of patterns on rubber. And out of nowhere (Milan, actually), the solution presented itself in the form of a graduate design student holding an outlandish prototype. The designer was hired, the shoe was created and the “barefoot running” movement was born.

The parallel here is that neither solution was on purpose. Tony Post was looking for the solution for Vibram, to be sure, but the solution arrived from outside – much as the rooted Nook idea came from the hacker community. But in both, the unexpected arrival presaged a rebirth; in Vibram’s case, a very real one and in Barnes & Noble’s case, a very potential one.

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Key Takeaways:

Ridicule is probably the first sign that something’s worth looking at more closely. Everyone ridicules the Five Fingers shoe when they first see it. Then, they see more people wearing them. They read about it. They think about what barefoot running might be like. They try a pair on instead of traditional “shock absorbers” and they buy them. Then, they’re instant evangelists.

Innovation usually comes from elsewhere. Why, I don’t know. Perhaps we get too close to our own problems. Perhaps we’re just better art critics than we are artists. But actively scanning the horizon takes smart business sense.

Be willing to change directions – even 180 degrees in the other direction – when the platform is burning. If you’re in the bookselling business, and you’re not Amazon, you’re facing a real uphill battle. Being willing to shift the playing field dramatically takes real guts. But this is a fascinating move and one that will rattle a good number of players in the consumer electronics business.

Being a great “Giant Killer” doesn’t always mean you end up killing a giant. Forgive the literary license, because it’s a great book title, but sometimes in real life you end up killing off all the other smaller players. I don’t think anyone’s going to not buy a Kindle from Amazon because of this. But I would definitely think that anyone looking to buy an Android tablet is going to include the Nook in their consideration set first. A minute ago, it wouldn’t have even been in the conversation.

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Let’s congratulate Barnes & Noble for a bold move. I think it was a smart one to embrace what was an outside and potentially subversive product hack and make it their own.

How can you employ this same philosophy to your business today? What do you ridicule?