Dislodging Entrenched Competitors

In a number of case studies where companies that were THE dominating player in their market were effectively annihilated, it was due to a quantum leap forward in technology.

Ironically, several companies also had the opportunity to acquire or bring the quantum leap technology to market and declined, in effect having a hand in their own downfall. There’s another lesson to be learned here, which comes into play after going viral and I’ll cover that in future blogs. This post and related posts are designed to focus on going viral and what it takes to accomplish that.

There’s an old adage in real estate investing: Find out where people are going, get there ahead of them and wait for them.

The same principle applies when you’re developing a quantum leap forward in technology. What will people gravitate towards as a natural tendency or inclination?

For example, the train over the stagecoach. Cars over horses. Calculators over slide rules. People had a natural inclination to transition from one to the next. And what about something more current?

Tablets over laptops. Thin, lightweight laptops (the MacBook Air) over normal laptops. Smartphones over flip phones. In each case it’s a quantum leap forward.

Great innovation trumps entrenched competitors—when that innovation aligns with what people will gravitate towards.

Did you know that Western Union had the opportunity to buy the telephone? It’s true—in 1879 Western Union turned down the opportunity because they didn’t think it was financially viable. At the time, Western Union had the telegraph industry covered.

Instead, Bell Telephone grew and prospered into one of the world’s largest corporations (AT&T) and became not only the dominant player in the market, but a monopoly.

Interestingly enough, today the land-line telephone is going the way of Western Union as the smart phone and VoIP (Voice over IP—i.e. the internet) is resulting in fewer and fewer people owning a traditional telephone. Until the quantum leap forward in wireless technology came along, the only way this market dominator was displaced was by the US government in an antitrust suit.

A comparable example today is with Microsoft and the famous Windows operating system. Apple and Linux are the only other operating systems available for desktops, laptops and servers, they’re nowhere near displacing Microsoft and nobody else is even attempting to break that stranglehold.

If desktops and laptops go the way of the telegraph, then and only then will Microsoft’s dominance of the operating system market dissolve.

How do you displace an entrenched competitor like Microsoft? A quantum leap forward in technology. Something that obsoletes the need for servers and centrally-controlled desktop pcs and laptops in the business world. Home computers and laptops that don’t require the compatibility with the user’s work computer.

The mobile device market is a whole new kettle of fish, opened wide by the iPhone and iPad and copied by Android. Android and Apple have taken a huge chunk of the tablet OS market and dominate in smartphones as well. They’ve become the major dominant players in this market segment. Google knew they couldn’t take on Microsoft with a pc-based OS, so why try? Instead they went after the mobile device OS market.

That’s why Microsoft is working so hard on Windows 8 (and the soon to be released Windows 10), cloud computing and beyond, battling for smartphones and tablets. Who will own the future?

And who can break the hold any of those three companies have on the OS market for all types of devices?

Just like the telephone over the telegraph, the smartphone over the telephone, the smartphone over the Blackberry, it takes a quantum leap forward in technology to displace an entrenched competitor. While the examples given are with mega-corporations having a huge impact on a world-wide basis, the lessons apply to markets of all sizes.

Small markets with one or a few dominant players act just like the major markets.

The only way to go viral over entrenched competitors is to develop and bring to market a technology that is a quantum leap forward that obsoletes the existing offerings.

In effect, you’re creating (or recognizing and serving) a whole new market. It’s not for the faint of heart!

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