retail news in context, analysis with attitude

Bernhard Schroeder, director of the Lavin Entrepreneurship Center at San Diego State University, has a column in Forbes about how entrepreneurship these days isn’t about having the best ideas, but rather about identifying the best opportunities.

“If you want to become an entrepreneur,” he writes, “but don’t know where to start, relax. It’s not about ideas, it’s about understanding and researching current industries that have not innovated their products or services and have a large customer market. If you think about what Netflix, Amazon, Uber and AirBnb did, you can clearly see, they created nothing new in terms of products. So, what did they do? They changed the ‘game’ in an industry that was not being innovative and was ripe for disruption.”

The term for this approach, Schroeder writes, is Blue Ocean Strategy, which “challenges everything that you thought you knew about the requirements for entrepreneurial success. Blue Ocean Strategy can be summarized in a nutshell: the best way to beat the competition is to make the competition irrelevant.”

Examples from his column: “Amazon did not build bookstores but built an enterprise infrastructure to have access to one million book titles and competed well with Borders and Barnes & Noble. Netflix did not use stores in their business model to compete with Blockbuster; instead they focused on customer service. Uber did not even try to buy cars and compete with the independent taxi companies, they created a mobile app. AirBnb does not own homes or hotels, instead they redefined the travel experience by uniting existing property owners onto a common easy-to-use platform.”
KC's View:
I think it probably is important not to dismiss the value of a good, original idea … though I agree that identifying ripe-for-disruption opportunities also is a good way to go.

Axios had a story the other day about the inevitable result of Blue Ocean strategies - which is that the folks with the biggest boats start acquiring the smaller, more nimble boats. Harry’s gets bought by Schick. Dollar Shave Club gets bought by Unilever. And so on, as “giants like Amazon, Unilever and Walmart are swiftly buying out plucky companies that start to threaten them.

“In a single transaction, these deals transform upstarts from worthy competitors to weapons in the giants' battle with other giants.”