Have you ever noticed that the ones who complain about competition and innovation, are the very ones who had the opportunity and never took it?
For me, I think there is no such thing as competition until you create it either through neglect, ignorance or arrogance for the marketplace in which you operate in.
Gary Vaynerchuk builds businesses. Fresh out of college he took his family wine business and grew it from a $3M to a $60M business in just five years. Now he runs VaynerMedia, one of the world’s hottest digital agencies. Along the way he became a prolific angel investor and venture capitalist, investing in companies like Facebook, Twitter, Tumblr, Uber, and Birchbox before eventually co-founding VaynerRSE, a $25M investment fund. This is his take on the market and the risk that companies take when they think that they are bigger than the market. Enjoy Gary’s take on why Uber and Airbnb never should have happened the way they did, and why business should take note.
"Uber and Airbnb are two companies that, I believe, should have never been started the way that they did. No, this isn’t a rant about their venture capital funding or their CEOs’ business decisions. This is about understanding and innovating in the market space so you don’t go out of business.
For example, in the last half-decade, we, as a society, have gone through an enormous cultural shift with the onset of the Internet, social media, and mobile devices. Everything from calculating your tip to ordering on-demand cars is now at scale—at our fingertips— and the market has taken hold of that notion.
When these technological shifts happen, too many businesses get left in the dust because they’re too comfortable with their current successes. By this, I mean they’re not reacting to the market and looking for ways to innovate in their current industry. They become complacent with what they already have.
Why were Garret Camp (the founder of StumbleUpon) and Travis Kalanick (founder of Red Swoosh), two people outside of the transportation business, able to create such a successful company that’s putting taxicabs out of business? How did two broke roommates (Brian Chesky and Joe Gebbia) figure out they could rent out their San Francisco loft and start competing with Hilton? The answer is simple: they innovated where their traditional rivals didn’t. They were innovators that saw the white space in the evolving Internet marketplace.
What really should have happened was that the owner of a taxi company should have seen the opportunities that Uber did, Hilton should have started AirBnB way before a start-up realised there was an opening in the market.
"there is no such thing as competition until you create it through either neglect, ignorance or arrogance"
And if you think about it, Uber and Airbnb aren’t just two “unicorns” that took away opportunities from the industry veterans. The faster you realise how fluid and quick the market is, the faster you can put yourself in a position for upside.
AAA did it when they started offering roadside assistance to drivers. On-demand, same-day courier services like UberRush and Amazon Prime Now took opportunities away from FedEx. Gmail took away game-changing, global communication from the U.S. Postal Service. It’s always been happening.
Whether you’re looking to start a new business or you’re in an industry you think will never go stale, you have to be an innovator in your market. Why? Because that’s the only way to get ahead of the curve.”
Bottom line is that the moment you think you own the market, the moment you get comfortable with what you are doing, is the moment that you start losing!
Thanks for reading
Craig Matthews is the MD of Stock Box, with over 30 years industry experience in retail development, specialising in independent retail programs.