The competition is invisible

I recently saw a prototype for the Google self drive car – It’s picture is below and looks kinda cute / cool / weird.

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Anyone who follows the technology world will know that Google have successfully driven their self drive cars without incident for more than million miles. But up until now, the cars have been retro fitted Toyota and Lexus’s – other companies cars they fitted their self drive technology to. This is a bit of a shift in the projects trajectory. The Google car, is quite It’s further proof that information, when distributed freely and easily changes the physical world too. That dramatic changes in information, have dramatic impacts on all things physical. But what it should remind business people is that we simply can’t know who our competitors are any more. In a world where everyone has access to all the major factors of production we end up with a global demarcation dispute. Non linear competition where brands and big businesses get blindsided by category newbies. We’ve already seen it in retail, music and media, and we are about to see it in every form of hardware and manufacturing. The established industries who should, could and would provide the next level of innovation probably wont.

Tesla is already around half the size in market capitalisation of GM and Ford after a few short years in the market. And as we can see by this post the auto industry better get ready for new players from the technology world – Google, and possibly even Apple. The auto industry would do well to remember that cars are about to become mobile lounge rooms, and all the high tech companies are already competing for the ‘lounge room’ in the house. Next they’ll be competing for the lounge room in transit. A preemptive sense of future irony right there. Even small players like Tomcar Australia (which I have an interest in) have proven you don’t need to own a factory to make best in category vehicles and disrupt an established industry base.

I also read yesterday about two absolute powerhouse Australian companies (both in the top 10) Coles and Woolworths better get ready for a new set of competitors. And while they mentioned a siphoning of revenue category by category, I believe they have a much bigger problem coming their way:

What to do with 1000+ stores when no one goes to a grocery store to get their shopping.

And no, this is not like discretionary retail which can be made a social, fun and entertaining experience. Grocery shopping is a chore and technology has a habit of removing chores from the human experience. Not many people run fast or lift heavy things for a living. And mind you, the word computer, was originally a job title, not a machine.

In the food industry there is a term called ‘share of stomach’. What share did the food company get of the stomach. Which is the type of measure which is used to assess the truth about who the competition is, and where the revenue threats lie. I feel as though every industry needs to develop their own ‘Share of Stomach’ metric so they can see the real change in their industry. Maybe all industries related to transport need to measure share of human movement? Self driving cars, aren’t just a competitive play against legacy auto industries, but it’s hard to see city car parks being a valid business when we can ‘send our car home to our driveway’ and get it to pick us up later. It also raises questions about what relatively new businesses like Uber will do when cars don’t need drivers? Chances are they’ll need to become a system which organises and delivers our cars?

Just like life, the real life threatening diseases are from entities our body hasn’t encountered before and built a natural defence against. At times like these, a tectonic shift, business would do well remember lessons from the natural world.

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Who is your competition?

If we ask any well know brand who their major competitors are the answers are reasonably predictable. It’s those brands who have that other part of the market share pie. This is what we all got taught during marketing class, and it made sense in the AC Nielsen TV ratings market share industrial era. The problem is that it makes a lot less sense as we transition to the digital age. An age where incumbents are constantly being exposed on the flanks, rather than by direct competitors. If we went back and asked a number of industrial world businesses who their main competitors were, the story becomes much clearer:

Kodak: At first it was Fuji & Agfa, closely followed by Cannon and Nikon…. but really in the end their nemesis came from a different planet. The planet of Apple, Google, Instagram and Facebook. What is Facebook really other than a Kodak moment 2.0?

Encyclopedia Britannica: Clearly World Book and later Encarta, the CD ROM based delivery by Microsoft. But in the end it was you and me who provided more accurate data on the subject of ‘everything’ as we populated both Google and Wikipedia. We turned out to be more accurate, more timely and we came at everyone’s favourite price – free!

Free to Air Television: First became very worried about movie rental stores (VHS, DVD) followed by cable TV. While now their real worry is the other screens in the home as Netflix, Youtube and Pirate Bay eat their lunch.

There are of course an unlimited number of examples with the same story.

But the lessons in a period of technological transition are two fold.

Incumbents: If your company or brand is in a battle defending revenue and market share from industry players, you’re focusing on the wrong area.

Entrepreneurs: If you’re aiming to disrupt an industry that has intense and focused market share battles, you’re focusing on the right area.

Startup Blog says: In times of transition, it pays to look to the sides instead of straight ahead.

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The ultimate innovators – kids

I’m starting to believe that the ultimate requirement for innovation is ignoring barriers. Not inventing rules that are not there. The second part of this thought is that we are trained over time to ‘assume the rule’ – when in actuality there is no rule.

I’ve been watching my daughter recently do little the things that I’m sure all kids do.

I play a game with my daughter where I show her how to stand on one leg. I don’t tell her what to do, I just stand on one leg…. and of course she wants to do it too because it looks like fun. And she copies me immediately. But because she has only recently learned to walk, she can’t quite manage it the way I do. So she without hesitation runs to the nearest wall, puts one hand against it to gain balance, and successfully stands on one leg. At this point she is very pleased with herself that she has managed to do it. Big smile ensues as she looks to me for approval…

And here’s the kicker… I am pleased with her too. But not in a kid like condescending way. I am seriously happy with her approach. And here’s why:

At no point was any rule given that you can’t lean against the wall. She hacked the system and got it done. I clap her and encourage her. In this instance it’s all about the objective, not the method. And the one thing I will never do is start to reduce her mind with rules that just aren’t there.

What we should do with our startup is innovate like kids do. Ignore how the bigger, more resource laden and older incumbents do things, and just hack for a result.

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Friends, fans and followers

Humans love to count. Here’s a list of some somethings we count obsessively:

  1. Our age
  2. Our money
  3. The value of our house
  4. Salaries
  5. The value of 401K (superannuation fund)
  6. Population
  7. Members
  8. Friends, Fans, Followers
  9. Hits, views, comments.
  10. Market share
  11. Percentage profit
  12. Traffic road toll

Really, we count almost everything. None of us are immune to this human symptom of counting. It’s the ultimate technique for organising and planning, in fact it’s what makes us top of the food chain.

So the question for startups is this: What are you tools are your creating that  your people count and compete with?

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Boring and Stealth

There’s been a lot of conjecture as to my post below – that ‘boring is profitable’. I’ve been inundated with tweets from people providing examples of exciting yet profitable companies. And yes, exciting can be profitable. But that wasn’t the point of the allegory. The point is that Boring is Stealth!

Stealth bombers are about being undetected. If you can’t be seen, you can’t be shot down. Pretty simple concept really. The equivalent of stealth in business is boring. Because boring stuff is invisible to the majority of consumers and entrepreneurs. Given the way we are ‘attacked in business’ is by competitors, then the best way to avoid competition – is by being invisible.¬† Which for startups is much more probable than developing a monopoly through competitive barriers or brand loyalty.

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