Love your competitors - how great businesses do strategy | Alex Smith | TEDxFolkestone

Summary

This engaging script explores the paradoxical idea that businesses can achieve greater success by refusing to compete. It illustrates how competition often leads to market clustering and conformity, resulting in unprofitable markets, as seen with Nokia's downfall. The speaker advocates for a non-competitive approach, where businesses carve out unique market niches and thrive, exemplified by Apple and Southwest Airlines. The speech concludes with a call to reimagine business as an ecosystem where collaboration, not competition, drives success.

Takeaways

• 🐕 **Competitive Spirit**: Humans have an innate love for competition, manifesting in various forms such as sports, games, and even business.
• 🏆 **Unique Competitions**: Unusual contests like the 'World's Ugliest Dog' and 'Crying Baby Competition' showcase the breadth of human competitiveness.
• 🛍️ **Business as Battleground**: Businesses often view the market as a battleground, with competitors to be defeated and market share as the prize.
• 🔄 **The Perversion of Competition**: The speaker suggests that competition in business might be unnatural and detrimental, potentially corrupting the essence of business.
• 🚫 **Refusing to Compete**: The concept of deliberately choosing not to compete with others, allowing them to thrive, and seeking a different path to success.
• 🤝 **Collaboration Over Competition**: Embracing a collaborative approach can lead to a more balanced and profitable business ecosystem.
• 📉 **Clustering Effect**: Competition can lead to clustering, where businesses become more similar, reducing diversity and often leading to a race to the bottom.
• 📱 **Nokia's Downfall**: Nokia's attempt to compete directly with Apple led to its decline, illustrating the dangers of trying to mimic competitors' strengths.
• 📈 **Southwest Airlines' Success**: Southwest Airlines' decision to focus on a specific market segment and avoid competing on traditional metrics led to significant success.
• 🌱 **Ecosystem Thinking**: Viewing businesses as parts of a larger ecosystem, where each has a unique role, can lead to a more sustainable and prosperous market.
• 🧠 **Darwinian Business Strategy**: Reinterpreting 'survival of the fittest' to mean fitting into the system, not just out-competing others, can offer a new perspective on business strategy.

Q & A

What is the prize for the winner of the world's ugliest dog competition?

The winner receives a $1,500 cash prize, a handsome trophy, and a trip to New York City.

What is the nakki sumo competition and how does it work?

The nakki sumo competition, also known as the crying baby competition, is a Japanese event where babies compete against each other to see who can cry the quickest and loudest when yelled at by a sumo wrestler, based on the proverb that crying babies grow healthy and fat.

What is extreme ironing and how did Jason Blair excel in it?

Extreme ironing is a sport that blends outdoor activities with the satisfaction of ironing clothes. Jason Blair excelled by taking his ironing board and ironing in the middle of the M1 motorway just outside of London.

What is the main point the speaker is trying to make about competition in business?

The speaker argues that competition in business is often unnecessary and can lead to a degradation of business, markets, and the people they serve. They suggest that refusing to compete and finding a unique market position can lead to greater success.

What does the speaker mean by 'refusing to compete'?

Refusing to compete means choosing to disengage from competitors, letting them have their share of the market, and sometimes even making decisions that are in the best interests of competitors.

What is the phenomenon called 'clustering' and how does it affect markets?

Clustering occurs when businesses in a market start to compete and become more alike, leading to a commoditized market with little differentiation and often resulting in a race to the bottom in terms of pricing and margins.

How did Nokia's competitive spirit contribute to its downfall according to the script?

Nokia tried to compete with Apple by making phones that were similar in design and values, which were not in line with their established market position. This led to the creation of inferior products and ultimately contributed to their downfall.

What is the significance of the iPhone's market share and profit share in the context of the script?

The iPhone had a market share of only 14.7% but accounted for 79% of the profit share in its category, demonstrating the effectiveness of owning a portion of the market in a non-competitive way.

How did Southwest Airlines differentiate itself from competitors and succeed?

Southwest Airlines focused on a low-cost model,放弃了business travelers segment, and created a distinct market position that allowed them to thrive while other competitors struggled.

What is the 'survival of the fittest' concept as it relates to business according to the speaker?

The speaker suggests that 'survival of the fittest' in business does not mean being the most competitive, but rather finding a unique and complementary role within the market ecosystem, similar to how species coexist in nature.

What is the final call to action for businesses that the speaker proposes?

The speaker encourages businesses to engage in more cooperative and less competitive behaviors, suggesting that this approach can lead to greater value creation for both the businesses and the markets they serve.