It would seem the Four Horsemen already have a monopoly on the key organs of the human body. So, what’s left? And if there is no other great market opportunity, how do you compete with them?
Let’s take the latter first. The current horsemen look so gigantic, rich, and dominant that it would seem impossible to attack them directly. And that’s probably the case, but history suggests there are other strategies. After all, each of these companies in their day had to take on equally dominant and established corporate giants—and beat them.
For example, when Apple started out it faced several huge competitors. IBM was one of the biggest companies in the world and dominated electronics in the workplace (as the saying went, “Nobody ever got fired for buying Big Blue”). Hewlett-Packard, almost as big a company, and arguably the best-run company of all time, owned the scientific handheld and desktop calculator business. And Digital Equipment was running neck and neck with both companies in minicomputers—and winning. How could Apple, started by two scruffy phone hackers in a garage, possibly compete with these monsters?
It did so with a combination of fearlessness, superior design, and luck. You know about the first two, but the third might surprise you. Steve Jobs knew he had a world-class product in the Apple II thanks to Woz’s brilliant architecture and his own elegant design. But no corporation was going to buy his computers when they could buy inferior, but adequate, machines at a lower price and guaranteed volume delivery.
So, Jobs instead went after the individual consumer. There, he had free reign: his small competitors were stuck building hobby machines that average folks didn’t trust or understand. Meanwhile, IBM was staying out of personal computers because it was fighting antitrust indictments over its mainframe computers; DEC had dismissed the idea of consumer computers, and HP—even after Woz offered Apple to Bill Hewlett—decided to focus on engineers and other professionals. Within three years of its founding, Jobs and Apple owned the personal computer market.
Then something interesting happened: those same consumers started sneaking their Apple computers into the office. It wasn’t long before an insurgency was in full flower, with individual employees by the thousands using their Apple computers at work in violation of the rules put down by their employers’ IT departments. That was the beginning of Apple “cool”—users felt like mavericks, corporate guerillas, fighting the Man in the MIS department. That’s why, when IBM finally unleashed its PC, it destroyed the rest of the personal computer industry. But Apple, like the tiny mammal skittering under the feet of a dinosaur, survived... and eventually triumphed.
Google did the same thing by pretending to be small, cute, and honest with its simple homepage—even after it crushed all other search engines. Remember, Google started on Yahoo, which decided to outsource search to the little engine that could—and did: Google became a hundred times more valuable than Yahoo, which didn’t see the threat. Facebook defeated the dominant Myspace by being the nice, safe alternative that wasn’t overrun with sexual predators, or at least the fear of them. Facebook’s roots on Ivy League college campuses made it feel more upmarket and safe: it demanded a .edu email address. The requirement to confirm, and share, one’s identity created a different, more civilized decorum on Facebook.
Content on Twitter is more likely to get a hostile response than when posted on Facebook, since, similar to real life, it’s easier to be an asshole anonymously. Amazon was careful never to portray bookstores as competition, even asserting that they wanted them to survive—the same way a reticulated python feels bad for the cute little mammal it suffocates and swallows whole. Similarly, as Amazon invests billions in last-mile delivery, Mr. Bezos claims Amazon has no intention of replacing UPS, DHL, or FedEx, but to “supplement” them. Yeah, that’s it, Jeff and Amazon are here to help.
There is no reason to believe that these strategies—insurgency, false humility, security, and simplicity plus discounting—won’t work again one day against the horsemen. Giant companies face their own challenges: they lose their best talent to more rewarding start-ups; their physical plant grows old; their empires grow so big they can no longer coordinate all their pieces; they get distracted by investigations by envious or nervous governments. The processes put in place to scale begin slowing the firm down, as managers begin believing that adhering to the guidelines is more important than making good decisions. Bezos insists that there will never be a Day 2. It may seem unlikely that Amazon will one day lose its way. It will. Business mimics biology and, thus far, the mortality rate is 100 percent. The same is true of the Four. They will die. The question is not if, but when, and by whose hand?
This is an extract from Scott Galloway's The Four published by Random House