Via Alex Rampell (2015):
“The battle between every startup and incumbent comes down to whether the startup gets distribution before the incumbent gets innovation.”
White Claw succeeded, gaining distribution before Budweiser could imitate/innovate. Hallmark is entangled with this problem as Disney/Hulu carry Lifetime. Barefoot Wine succeeded finding the overlap between price-point, JTBD, and non-wine-snob. Snapchat introduces stories, Facebook copies. Innovation vs. Distribution.
There are a few options given this condition.
1/ Rampell suggests to “be boring”. Or, to be first in the chronology. Customers wanted Comcast before the wanted Tivo.
2/ Innovate where the competition can’t. This is (was?) the SoFi plan: filter better borrowers who default less lowering costs and pass on
the some savings.
3/ The system might change, as in the case of medicine where the large firms (Glaxo) mostly license innovation.
This post will be the first thread in a larger exploration of this idea. For instance, Etsy seems to have held off Amazon Homemade and Candy Crush is still crushing it.