FUTURE MAP 2025-2045: Discover the Crucial Trends Consumer Brands Must Act on to Prosper in this Massively Transformation Era. See that here.
Successful companies with well-established products are being threatened by newcomers. Winners don’t lose when new rivals attack from the high-end of the market. They lose when startups attack from below. The Innovator’s Dilemma by Clayton M. Christensen
The point is that when an established company weighs the cost of new technology or talent against what it already has, it usually sticks with what’s familiar. Why? Because the marginal costs of using what you have are almost always lower than the full costs of investing in something new. But that’s a trap–and one that companies that are young and hungry don’t get caught in, because they don’t think in terms of marginal costs. Rather than basing such selection on costs, start-ups tend to pick what’s best for the job. It’s a key reason newbies displace the old guard: They have better tools. Clayton M. Christensen
These are great statements of strategy that I thought of recently after meeting with a company. I know the founders and have worked with them before in another venture. Their new company is a D2C (direct-to-consumer) fulfillment warehouse that is using cheap, off-the-shelf technology plus the founder’s own experience in this space to create a much more cost-effective solution for D2C product companies. I have used D2C companies and have always found them to be inefficient, expensive and bloated with old systems and processes. About time this space get’s attacked from below.
How can you attack from below in your startup? Or vice-versa, how can you protect against someone else attacking you from below?