- Brand or Technology as Barrier to Entry
An insiders guide to unfair competitive advantage,” Skok describes the fundamentals of building a go-to-market strategy for your business.
A brand coupled with segmentation and specialization could be a great combination when starting a business. First mover advantage is very important in branding. Underserved or unserved market should be identified when creating a brand. Design can be copied easily by competitor, but a technology with high switching cost could prevent imitators from crowding the market and taking market share from the incumbent. For example, in the technology world, Amazon AWS, Netflix and Tesla are great brands that derived their advantage from technology and first movers advantage.
Another example is the free model. Google Doc, Andriod and Linux are free, which created a niche market for them against Microsoft, which is a paid model. Capital Ex and Op Ex dichotomy could also create a brand opportunity. Airbnb became successful because it gives people the opportunity to live in a home on a short time basis without owning it. Same can be said of car sharing or car hailing services. Today, companies prefer to use cloud services instead building the infrastructure themselves because it’s cheaper and no maintenance cost involved or necessary.
Big Bang Disruption
Twitter’s sudden success with minimal investment underscores an important dimension of big-bang innovations: They are often born of rapid-fire, low-cost experiments on fast-maturing, ubiquitous technology platforms. They don’t need budget approval and aren’t vetted before development begins. When cost is low and expectations are modest, entrepreneurs can just launch their ideas and see what happens.
Like Twitter, these innovations are often built out of readily available components that cost little or are free. So-called over-the-top internet services, including Netflix, Hulu, and Skype, use existing home internet connections and nonproprietary audio and video compression protocols to challenge the bundled channel selections and voice services of cable and phone companies. These new tools allow consumers to pick and choose the content and features they want, thwarting the strategic plans of the very companies that provide the infrastructure. In the future the most successful innovators may be those who simply happen upon the right combination of other people’s technologies.
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