I was reading an article on the Wall Street Journal the other day titled "When Start-up Dreams Turn Prosaic, Plod Along". It was about how start-ups don't really boom or bust like in the late 90's, but instead plod along due to cheaper hardware, out-source labor, and open source software. As the author was describing the start-up Odeo and the views of its founders, I thought to myself, "Did they think about competitive advantage? If so what was it?" Odeo was supposed to be the one-stop site for podcasting, (their interesting history found here), however Apple had seemingly beat them to it by launching their podcasting service first. Though I think in this game even if someone launches first if your company has enough competitive advantage it would quickly gain customers over. I suppose Apple's advantage here is they are the first comers, they're well known, they are the supplier of the i-Pod, and they can piggy back off of their i-Tunes services. Ouch, tough to beat.
All this led me to think that when doing start-ups or things in general, one has to look for competitive advantage, not just ideas. Take Joel on Software for example (it's a blog I like to read), his competitive advantage is his blog, and the books he publishes. They are absolutely a great public relations and marketing tool. In fact, that's how I even heard about his company in the first place, through his book. In the interview with Joel from "Founders at Work", Joel specifically states that his competitors followed his model but missed his blog, and thus did not end up as successful. Another recent example is Netflix vs Blockbluster. What is Netflix's advantage now that Blockbluster has a similar service and the ability to utilize their brick and mortar stores as return depots? Netflix's recent move is to offer movies directly online, though that can be replicated as well. Netflix is obviously aware
of the situation, so we shall see where they take the next step.
Bottom line is, without a competitive advantage you will be squeezed out of the market. The next topic to explore, when I finish The Innovator's Dilemma by Clayton Christensen is how players in niche markets overcome the larger guys in other markets.
All this led me to think that when doing start-ups or things in general, one has to look for competitive advantage, not just ideas. Take Joel on Software for example (it's a blog I like to read), his competitive advantage is his blog, and the books he publishes. They are absolutely a great public relations and marketing tool. In fact, that's how I even heard about his company in the first place, through his book. In the interview with Joel from "Founders at Work", Joel specifically states that his competitors followed his model but missed his blog, and thus did not end up as successful. Another recent example is Netflix vs Blockbluster. What is Netflix's advantage now that Blockbluster has a similar service and the ability to utilize their brick and mortar stores as return depots? Netflix's recent move is to offer movies directly online, though that can be replicated as well. Netflix is obviously aware
of the situation, so we shall see where they take the next step.
Bottom line is, without a competitive advantage you will be squeezed out of the market. The next topic to explore, when I finish The Innovator's Dilemma by Clayton Christensen is how players in niche markets overcome the larger guys in other markets.
1 comment:
Hi!
I quite liked your blogs and comments, and I find you a very interesting person. Maybe we can be good friends. This is my blog (in spanish, sorry) www.silvilunazul.blogspot.com
msn adress: silvilunazul @ hotmail.com (remove spaces)
email: silvilunazul @ gmail.com (remove spaces)
take care!
silvi
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