As An Innovator, You Must Create New Paths

As an innovator, during that phase of creating a new basis of competition, it could look lonely. Fascinating, category-defining innovators understand the power of going alone. In this Harvard Business Review piece, I explained why that is necessary: one single strategy bullet will not destroy your business even as the industry is distorted. When I wrote this article, I was co-designing an accelerometer for the iPhone, contracted to the company I worked at then. My mindset was on innovation.

‘For a long time, Ford, Chrysler, and GM followed the same strategy: they built big gas-guzzlers. Asian competitors attacked that model, took market share, and transformed the U.S. automobile industry.

‘Also for a long time, Yahoo and AOL offered email customers 4MB of storage. Google came out with Gmail and provided a free 1GB email account (250 times as much). Many switched.

‘In both cases, the new entrants attacked a reliable business model and disrupted a market in which the incumbents competed by cooperating, tacitly agreeing to procedures that ensured that the industry as a whole remained continuously healthy. Indeed, terms like “win-win” and “coopetition” are very common in our contemporary business lexicons.

‘But in many cases, firms fail to separate the necessity of preserving their industries from developing individual survival strategies. They become docile and follow one another. From wireless carriers to broadcast TV, casinos to airlines, we often see an ordered communality within industries. They move in packs regarding features, services, and prices.’ Unfortunately, when an innovator strikes, all of them could be taken down together. Hello Tesla to Ford/GM/etc. Continue in Harvard here.

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