Business and Military Strategy


I have been reading the book Guns, Germs, and Steel by Jared Diamond, and it has inspired a concept/theory on developing competitive online and mobile businesses that I am going to pursue further in my work with our portfolio companies.

At one point in the book, Diamond discusses the invent and adoption of guns by a number of countries. At the time, guns were the most powerful weapon. Countries that failed to adopt and manufacture guns for military use (the reason did not matter, whether cultural, tactical or lack of know-how), eventually succumbed to their neighbors or other invading troops in possession of such advanced weaponry.
A parallel can be drawn to online or mobile businesses in today’s world that have a product, but are not leveraging the necessary tools (or “weaponry”) to compete aggressively. Consider a small, vulnerable startup without “guns” taking-on larger industry giants with “guns.” The startup needs to get on level footing before any shift in market share or significant user adoption takes place. Another way to view this is to ensure your product has at least the same level of core functionality as your most significant competitors, and then innovate on top of that base. Note: There are obvious exceptions and I am being general in my statement.
Right now, there is an unprecedented number of free tools that allow business to increase the virality, social interaction, visibility and overall stickiness and competitiveness of a product or service. These can and should be leveraged to topple giants.
Virality and Social Interaction: I am referring to the use of Facebook Connect and Twitter/OAuth to increase social interaction, sharing of links, and recommendations to a user’s social network. The websites that have adopted the use of Facebook Connect have seen massive increases in hits to their website; laggards and late-adopters are suffering, and those who adopted early are reaping the benefit. Use Facebook Connect. Virality can be spread many other ways; remember content is still king — create a company/product blog and start a Twitter feed to inform your followers about industry trends and product updates; also make sure to address any concerns that users voice about your product. By using Twitter, companies can stop bad press before it starts, which could save startups one of their nine lives so to speak.
Stickiness: Give users a reason to return to your website or mobile application. Can you think of way to demonstrate continuous value to users of your site? If you can, you may enjoy more frequent visits from users. A user’s return could be influenced by social pressures (responding to a request driven/initiated by a friend), self-interest (check alert / view an update), curiosity and general need. Make use of different technologies to stay in touch with users, according to the preferences they like — allow them to select options including email, SMS (may be costly), Facebook, Twitter or through other widgets that may integrate with iGoogle or other portals.
I am going to continue to develop this theory. The next book on my reading list is Art of War by Sun Tzu; I hope that will be a good catalyst for a good follow-up post.
As always, I invite you all to contribute your thoughts below. Can you draw any other parallels between military strategies and business?

One thought on “Business and Military Strategy

  1. Just discovered this (and added to my Google Reader).

    GGS is a wonderful read. One of the lessons I took from it is how organizations must take care not to be too rigid or authoritative in their operating policies — balance must be achieved between getting the disparate parts of an organization working together effectively and giving them room to be creative.

    Diamond describes the contention between natural gas and electric lighting in Europe. Despite being developed in England, there was heavy lobbying pressure from the natural gas companies to prevent electric street lighting from being rolled out. Technology obeys no boundaries, and the continental countries (the Netherlands?) started using it. Soon, the advantages were too big to ignore and so eventually England switched over too. The various regimes in Europe — with different styles of government and market structures and geographic proximity — enabled innovation to avoid being entirely squashed.

    Contrast that with China, which effectively was unified since 221 A.D. If one ruler decided to shut down the shipyards for a decade (something like this happened), there was no other region which could keep innovating.

    This ties into companies that become big. You need to keep a wing or two that is allowed to deviate from the lockstep that other wings are on — even if it means suffering some inefficiencies. When I look to Microsoft, I see Microsoft Live and Microsoft Live Labs. Microsoft Live has a different feel from the rest of the corporation, and they release products that directly compete with existing windows products, like Live Photo Gallery, Live Mail, etc. I've found the 'Live' editions to be better than the ones that ship with Windows. I sorta joke that this group is like a splinter group within Microsoft, allowed to do things that groups who have to contend with heavy legacy support issues or existing-software integration don't have to.

    With social networking tools, rather than outright banning them from employees or the workplace, let a small group or division use them. Sure, they'll make mistakes. But they'll keep an eye on the technologies, learn best practices, then they can share the info with the rest of the organization once the comfort level rises.

    Sorry for the length of the post, but that's a business lesson I took away from GGS.

    best,
    Saket

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