800 Pound Gorillas Seldom Knockout 800 Pound Gorillas

August 19, 2013 Narinder Singh

I recently wrote a post – Why Enterprise Technologists Should Pay Attention to Startups and Opensource (and CloudSpokes) and received many comments on if and how it often applied to more than technology.  In many cases it holds true.

In large organizations we spend a disportionate amount of time looking at our peers in the competitive landscape.  At Andersen (pre Accenture) we looked at the Big Six, at SAP we looked at Oracle.  I’m sure Coke looks at Pepsi, Hyatt at Marriott, Fedex at UPS and so on.  There are general theories on how much you should consider competitors (or not) but not enough on how you should look at business model disruptions.  Its a rare case where a large player “knocks out” another large player in a market.  But we have become accustomed to seeing organizations come seemingly out of nowhere to disrupt an industry (see NetFlix to Blockbuster, Amazon to books and computing and retail, Apple to phones and the music industry, etc.).

Similar to the analysis of technology, startups have no assets to protect and are free to disrupt the business model without worrying about where revenue is today, if suggestion / executing on disruption will be enhancing or career limiting, etc.   They will reimagine your business through the eyes of today’s landscape, customer and non customers.

Yet each day thousands of startup ideas are thrown about or started and few rise to disrupt markets, so how can you know which ones you should watch ?

1.  Examine why customers and non customers choose someone else outside of your core competitors.

These are the loss analyses that are most often ignored and put in the very small “other” bucket.  If some company that seems to be “hot” is also showing up in small sliver of your deals, its already further than you should be comfortable with.

2.  If you look at what someone is doing and say “we could never do that because…”

If there are new competitors who are essentially playing by different rules, you should examine if those rules can change the market.  If they can, they are dangerous because your current way of doing business will hold you back from the new paradigm (examples include Uber and AirBnb and the sharing economy, business going direct in a channel world, etc.)

3. Investigate if your market is losing the talent war.

Are key people in your organization and your competitors leaving for a company proposing a new model ?  In many cases we see talented, frustrated people from larger organizations jump to newer companies / models because they see them doing the kinds of things that they aren’t able to make happen in their current structures.

Reimagining your business model or functions in a large organization can be difficult.  Use what new models are happening in your industry to light a fire in your business to act, validate ideas that have been incubated, and to inform your M&A focus. Even if it looks “pricey”, your market may be at stake (i.e. see Larry, Mark and #Bromance)!

 

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