I don’t know if you remember the story of Jack and the Beanstalk.
In it Jack climbs up into the clouds, he meets the giant in his house, gets chased by him. Then as the giant cambered down the beanstalk he chops it down whilst the giant is vulnerable.
Boom! Jack gets the gold and the sobriquet of giant-killer (Sobriquet being a word I’ve never written in polite company before).
What does that story tell us?
- Don’t fight a giant in his own house,
- Fight him when he is vulnerable.
This ties back to the maturity model of a company. From my research, the innovation cycle goes like this:
- The market opens up;
- Thousands of new entrants crowd in with a variety of business models;
- The market coalesces around a small number of business models that maximise value;
- It stays like this for a long time until the external environment starts to show weaknesses in business models;
- The industry tries to change; or
- More likely a company comes from outside and exploits the market changes to create a new business model and opens up the market.
I’m not going to go into lots of case studies here, but as I wrote the above I was thinking about the automobile, airline, legal and advertising industries.
So when do you come up with a new business model – or set out as a giant-killer,
It’s at points 2 or 5.
At 3, what you want to do has probably been tried and most competitors have got too much traction for you to overcome.
At 2, you are often in a big crowd – and if you haven’t weaponised your business model you are in an execution/ luck bloodbath.
At 5, you actually have a lot of opportunity as the giants of the industry are off-balance on the beanstalk and can’t counter the tiny chops of your little axe.
The question is when does 4 become 5. When does a business model become vulnerable to a giant-killer?
Think on that and send any thoughts and comments.
More thoughts next week.
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