Close Followers and the proverbial cash cow

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Thought provoking dialogue on Dare's space. I suppose you can find meaningful bits there on a occasion. It appears that the common "Innovators Dilemma" argument is even more pervasive and can be easily applied to the digital realm. In fact, we have several contemporary examples from which to choose.

  • USPS vs. Email
  • Napster vs. Recording Industry
  • Microsoft vs. FOSS

You could also add the US auto industry to that mix as well. At its premise, most would agree that you innovate only when necessary. At least this what I have studied in all of my product development text books. The conundrum is that the longer you milk that cash cow or the product which your business owns tremendous market share, eventually you run the risk of losing a competitive advantage in other scarce markets. Although, the sector which your cash cow dominates has limited competition, it is unlikely that your edge will be eternal. The moment innovators enter that space, they will eat your lunch.

There are many reasons for limited competitors in a particular market space:

a) Minimal growth opportunities
b) Technology cruft
c) Monopolistic practices

Although, I discovered the Napster phenomenon quite late, it was arguably the most disruptive technology to surface in quite sometime. It essentially, spawned several other P2P networks and destroyed a very flawed music industry cost and distribution model. The whole copyright argument annoys me. There is more discussion here.
Regarding digital media and copyright. I would highly recommend Dr. Lessig's, "Free Culture" text to anyone who wants to understand the impact of P2P filesharing and it relationship or lack thereof to decreased CD music sales.

Clearly, software patents and copyright have the potential to stifle technology innovation. Worse yet, it can be used a FUD tool to coerce. It seems that Redmond has been rattling their patent sabre a great deal lately. I am still waiting to see the source code. I'll save that discussion for another time.

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    This page contains a single entry by AG published on June 1, 2007 1:11 PM.

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