The TiVo Problem (trailhead 1)

This post will act as a trailhead for the TiVo problem. Coined by Alex Rampell, it’s the contest between incumbents and innovators. As a question: can incumbents get innovation before innovators get distribution.

Examples:

  • Netflix innovated to distribution before Blockbuster distributed innovation.
  • White Claw innovated to distribution before Budweiser distributed innovation.
  • Tim Ferriss innovated to distribution before Known-Media-Personality-A distributed innovation.

In the Netflix example, Mario Cibelli spoke about how Netflix fixed many small problems that accompany innovation. That work on a small p, large N problem helped Netflix stay ahead of Blockbuster.

But it’s not easy.

Kara Swisher joked that Evan Spiegel (of Snapchat) is the chief designer of Instagram; an ongoing contest between the distribution of Facebook/Instagram and the innovation of Snapchat. Bill Abbott, CEO of Hallmark complained about the distribution advantage that Lifetime has, as a Disney owned company, riding along on sister-site Hulu.

One of the more interesting instances ‘cheating’ on distribution. That’s the case of 5-Hour Energy, whose founder Manoj Bhargava noticed that getting in the convenience store coolers would be a tall order. But getting on the cash register counter was much easier.

For Innovators, there appear to be at least two techniques:

  1. The weak/strong dichotomy. This was the 5-Hour Energy plan. Coca-Cola’s manufacturing and marketing strength was also their weakness. Innovators then should go where Distributors can’t because of their established business.
  2. In his original assessment of the Innovation-Distribution race, Alex Rampell suggested to ‘Be Boring‘. This is unglamorous fixing of sorting machines at Netflix.

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