As the little guy, albeit with some pretty large aspirations, how do you exactly go about taking on the 600 lb gorilla that has billions of dollars in resources and tens of thousands of employees? The gorilla has been in the industry for ever, knows all the other chimps in the space and is the undisputed leader. So, how do you, with limited resources, almost no name and a tiny team expect to, well, overthrow this big guy? You did have large aspirations, remember?
Assume the incumbent is in the industry of creating horse-carts. He knows everything there is to know about horse carts – which breed works best for what purpose, what food the horses should eat, how comfortable the cart needs to be and so on. You can’t compete with this guy on horse-carts. He has tens of thousands of horses for every imaginable type of cart and he is killing it.
So, how do you beat him at his own game? Well, you change the game! If the entire industry is making horse carts, you do the unthinkable and get rid of the horse! Bring in a motor car.
Initially you will be scoffed at – “A man derives his worth from his horse”, “It’s so unnatural”, “Instead of a horse, you are creating a bunch of explosions 2 feet away in your fancy-schmancy car? Did you hit your head somewhere?”
You are crazy! Why would anyone want to copy a crazy person? So, while you are being scoffed at, you get ample time to solidify your base and perfect your product. You debut your invention and start selling to the early adopters. People are coming around to the idea – “The engine did not explode on anyone yet, right?” You start taking off – slowly, but surely.
Meanwhile, the 600lb gorilla is still selling billions of dollars’ worth of horse carts, although growth is taking a hit. Maybe it’s a one-time thing? Maybe they need to innovate more. The CEO calls for increased investments in R&D. The department gets to work and finds a substantial 5% increase in the horse’s energy output if they feed it a new combination of grain!
You release version 2 of your motor car – which is even better! People are warming up more to your invention – “You don’t need to take care of such a large animal anymore”, “My friend’s neighbor has one of those motor-things”
At Gorilla, Inc. there is a crisis. Sales are 80% of what they were. The CEO thinks they need to start looking into this motor car thing after all. He pulls up a team from across his company of the best horse-trainers and the best cart-makers to go and figure out this motor thing.
The Gorilla debuts its own motor car. Unfortunately, it doesn’t run too well. Turns out, the engine doesn’t eat a liquid diet of horse grain.
One extremely forward thinking employee in Gorilla, Inc. goes up to the CEO. “Horse-carts are old news. We need to stop making them and put everything we have into perfecting our motor car.” The CEO isn’t too happy – “You’re telling me that we should abandon a product line that accounts for 70% of our revenues over something that could just be a fad? Have you completely lost your mind? Who hired you?” The CEO fires the employee – “We can’t have people making such ridiculous comments in time of crisis here.”
Even though you’re doing well, the entire process has taken its toll on you. Either you’ve greyed all your hair or maybe lost most of it but there is a lot more ground to be covered. Now, there are a lot more companies now trying to create their own motor cars, though you clearly have the most advanced one – for now.
You’ve put the 600lb Gorilla on a diet. Play your cards right and you may end up taking it down after all.
If you study the rate of development in different industries since 1980, you’ll see that it is only the technology industry that has made significant progress. The rate of innovation in medicine and pharmaceutical industries is the same; commercial aviation has actually regressed and average air-speeds have slowed down since the Concorde got decommissioned; finance has become massive, though it works on the same principles as before; there hasn’t been a significant platform shift in manufacturing; and classroom instruction is pretty much the same since the 1800’s.
Most of these industries use newer technology as tools to do the same things that they keep doing, slightly better. It is the equivalent of finding a 5% increase in output by feeding the horse better grain. Industries need to be re-thought from the ground up for you to discover a motor car in there.
Now, technology is progressing to the “internet of things” – you know, when your front door pings you on your phone asking if it should lock itself since you forgot to do it. Mobile internet and cloud storage are already in place, while robotics and artificial intelligence are making a lot of progress. Technology will soon permeate the very essence of what you interact with – covering pretty much every industry.
So, while the incumbents use technology to make their horses slightly better, when will you debut your motor car?