DON’T WAIT FOR A COMPETITOR TO MAKE YOUR BRAND IRRELEVANT

Retrospect makes fools of many of history’s giants, consistently proving true the proverb, “Pride comes before a fall.” From enemies to empires, individuals to organisations, it’s the players who grow too comfortable at the top who suffer the hardest fall.

When I’m working with clients, I strongly encourage them to keep a watchful eye on the forces of disruption that they may be least expecting or least concerned about. Unconventional competition is constantly the catalyst for the downfall of the big players, not least because it is often dismissed, underestimated or simply undetected until it’s almost too late. Of all the many forces of disruption organisations are vulnerable to in the modern world, unconventional competition might be the hardest to monitor and respond to.

Take this assertion from Blockbuster’s CEO, Jim Keyes, in 2008: ‘Neither RedBox nor Netflix are even on the radar screen in terms of competition.’ This, just a few years after Netflix’s founder, Reed Hastings, had offered to sell his company to Blockbuster for a mere $50 million. Blockbuster declined.

Or looking to another tech player, Nokia’s Chief Strategy Officer, Anssi Vanjoki, dismissed the threat Apple posed to his company’s dominance in mobile phones: ‘With the Mac, Apple attracted a lot of attention at first, but they have remained a niche manufacturer. That will be their role in mobile phones as well.’

Klaus Schwab of the World Economic Forum once explained that business leaders would be wise to ‘consider their biggest threat to be competitors that are not yet regarded as such’. In other words, Schwab challenges leaders to regularly ask themselves: who are the outliers, the new entrants or the players in parallel industries who may not be on your radar yet as competition but could become so in the blink of an eye?

It is not only an awareness of unconventional competition that is necessary, but a response – and one that is appropriately unconventional. One of Steve Jobs’ most famous and enduring quotes is also one of my very favourites: ‘If you’re not willing to cannibalize your own business, someone else will do it for you.’

More than just a pithy platitude, this ethos is one that Jobs truly lived by. Consider how Apple essentially put its own iPod out of business. The popularity of the iPod, once the ‘must have’ technology device for music lovers everywhere, was largely eroded by the iPhone’s release in 2007. Once consumers could listen to their music on their phones, there was no need for a separate device. This, however, had been a deliberate cannibalisation on the part of Apple. In 2005, Steve Jobs warned Apple’s board that the ubiquity of mobile phones would render the iPod obsolete almost overnight. Apple’s solution, rather than waiting for a competitor to beat them to it, was to invent the ‘iPod killer’ themselves.

In the same way, Netflix cannibalised its own highly profitable DVD-by-mail business to make room for a more strategic online option. Reflecting on the boldness of this move, Reed Hastings, CEO and co-founder of Netflix, pointed to the genuine difficulties of anticipating change and deciding which future path is the best one to pursue.[1] After all, shifting from mail-order DVDs to content streaming seems like a ‘no brainer’ in hindsight, but was far from a sure bet at the time Netflix made the leap. Reinventing before disruption hits is by no means an easy feat, and the fact that we often only hear of the success stories in retrospect disguises how difficult cannibalisation can be.

A crucial disruptor to all the systems we were accustomed to, the pandemic paved the way for unconventional competition to come to the fore. The online car sales company Carvana is a case-in-point. In an industry that has been traditionally built upon the instore, physical experience of the product, the rise of online shopping would have seemed a fairly insubstantial threat to the conventional car-buying.

However, when the pandemic made this impossible, this disruptive new player rose through the ranks, allowing customers to do a ‘virtual inspection’ of vehicles online using 360-degree rendered images. They can then apply for finance and have their new car delivered to their home or to one of Carvana’s legendary multi-storey glass-walled “vending machines” near the customer’s home. Carvana’s sales boomed during the pandemic as customers proved to themselves (and the auto industry more broadly), that purchasing a car online without driving it first is in fact a viable option and could be the way of the future.[2]

Fortunately, some of the top industry players have responded to this disruption quickly, with General Motors ramping up its Shop-Click-Drive program whereby customers can get trade-in estimates, apply for finance and arrange for home delivery of new vehicles without ever stepping foot inside a dealership. While this initiative was launched well before the pandemic, GM reported that sales increased 40% over the course of 2020 and almost 9 in 10 dealers have now implemented the program to supplement their traditional sales models.[3]

Moving forward, GM’s emphasis on digital car sales is set to only increase with the launch of a new website called CarBravo. This move is designed to directly counter the likes of Carvana and Vroom by enabling GM dealers to sell both GM and non-GM vehicles online.[4] This may not be a full cannibalisation of a business, but it is certainly an example of a business being willing to risk rendering some of its existing practices and products obsolete for the sake of matching the competition – especially of the unconventional kind.

The top players who stay the top players are the ones who are humble enough to honestly consider the threat of little guys in the game. Rather than get comfortable in their seats, they regularly cannibalise and revive their own tactics, maintaining the hustler mindset that got them to the top in the first place. For leaders and organisations in such a position, examining the competition rising up in the places you normally wouldn’t think to look is the best thing you can do to inoculate yourself against irrelevance.

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Michael McQueen is a trends forecaster, business strategist and award-winning conference speaker.

He features regularly as a commentator on TV and radio and is a bestselling author of 9 books. His most recent book The New Now examines the 10 trends that will dominate a post-COVID world and how to prepare for them now. 

To see Michael speaking live, click here.

For more information on Michael's keynote speaking topics, visit www.MichaelMcQueen.net.

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[1] Hastings, R. & Andreessen, M. 2017, ‘Tech And Entertainment In The Era Of Mass Customization’, a16z Podcast, 25 February.

[2] Naughton, N. 2020, ‘The Pandemic Has Pushed Car Buying Online. It’s Expected to Stick’, The Wall Street Journal, 20 June.

[3] Naughton, N. 2020, ‘The Pandemic Has Pushed Car Buying Online. It’s Expected to Stick’, The Wall Street Journal, 20 June.

[4] Colias, M. 2022, ‘GM takes aim at Carvana, Vroom with used-car website’, The Wall Street Journal, 11 January.