How Proactive Builders Script Their Own Futures, and Shape Ours
Recently, my social feeds have been flooded with articles examining grocery tech and the future of supermarkets. This is no surprise as this once armored industry has now come under attack by one of of the greatest disruptors of our time, Amazon. One of my favorites posts was this, by one, Josh Domingues, founder of FlashFood. He gives a tremendous overview of how Amazon’s purchase of Whole Foods has already had a colossal impact on the entire grocery industry.
My favorite excerpt of the passage is near the end when Josh states the following,
But what I want to tell you, as a whole, is the grocery industry has been a gravy (see what I did there?) train for few for a very long time. They haven’t innovated because they haven’t had to. The industry as a whole is now faced with one of the most innovative companies in human history that has been trying for 10+ years to win in grocery before they decided to pay $13b ensure a victory.
The excerpt above, and the reaction to Amazon’s not-so subtle power move, is a clear lesson to both corporations and startups as to what happens when you choose to become reactive as opposed to a proactive organization.
If we look back at Josh’s excerpt, we are reminded that the grocery industry hasn’t innovated in decades, because they’ve never felt threatened. This lack of internal pressure takes me back to 11th grade physics, learning about Newton’s Law of Motion. To be honest I had to look up the exact definition, but in any case, Newton’s first law states that every object will remain at rest or in uniform motion in a straight line unless compelled to change its state by the action of an external force.
If we take a look at the recent moves Kroger is making (check it out here), or WalMart before them (see tweet below), it’s clear that these mega corps, who have been dominant for over two decades, are now playing catch up.
When you click on the link below, your attention will be immediately directed to a video which opens with, “Walmart’s latest message to Amazon: game on.” According to the Wall Street Journal, Wal-Mart warned a number of companies that if they want Wal-Mart’s business, they can no longer use cloud apps that run on AWS.
My initial thought to this opening statement was, “is the game really on?” This looks like a very reactive move by a company that feels threatened by a more agile, forward thinking, and revolutionary conglomerate.
Amazon’s disruptive and systematic actions are a prime example of a proactive company that dictates the climate for its competition. To hearken back to Newton for a second, they are the external force that is forcing retailers across industries to change, move, and innovate.
This mentality has led Bezos to create his own empire, perfectly illustrated by VisualCap below. Some may initially look at Amazon’s acquisitions below and see randomness, but I see just the opposite. Every move Bezos has made has helped expand Amazon’s retail footprint by creating logistical efficiency with acquisitions like Kiva Systems, Twilio, and even Whole Foods. Many of the others obviously increase their offerings, in the case of Zappos, Audible, and Living Social. Additionally, Alexa and Twitch secure their media and voice offerings, keeping them competitive with Google and Apple, while also ensuring their daily interaction with users.
The key here is that Bezos did not start with this empire, he humbly started in the retail book business. It was clear that this “saturated” market was dominated by a couple of reactive/risk averse players (Barnes & Nobles, almost out of business, Borders, out of business, as well as a couple of others), who lacked any sense of innovation — a market ripe for a new proactive player.
Too often, I see entrepreneurs thinking and building like everyone else. It’s not the problem of attacking a market with competition, but it’s the issue of attacking like everyone else. A common theme when examining the likes of Uber, InstaCart, Airbnb, Google, Amazon, was not that there was no market, but rather that they took advantage of the lack of innovation, and introduced a much better product than what was currently being offered. In each case, these simple solutions completely reinvented a market, and ultimately, became the gold standard.
This is why these companies were able to disrupt incumbent forces like the taxi industry, in the case of Uber, and the entire hospitality industry, in the case of Airbnb. Entrepreneurs that are tackling big problems in “unsexy” or stagnant markets, are the one’s with the greatest chance of universal success. To Peter Thiel’s credit, going from “0 to 1”, allows you to reset the game and mold it in your own image for everyone else.
For entrepreneurs currently building, I believe that with the rise of technologies like blockchain and artificial intelligence, there are clear windows for disruption opening up. These technologies go much farther than bitcoin and bots, and can again be harnessed to disrupt unsexy industries such like what Google did with SEO, or one of the aforementioned.
If you are looking to start a company, here are a few things to ask yourself,
- Am I following a trend or solving a real problem?
- How is the problem currently being solved?
- Does my solution redefine or create a brand new market?
- Can I not only compete, but truly dominate the market?
My belief is that reactive entrepreneurs and corporations will not be able to keep up with the current climate of relenting innovation.
With that, I’d like to close with a cheers to all the “proactive builders”, to those who don’t settle for the easy wins, to the original, and to those offer dominant solutions.
Would love to get your thoughts on current trends you see, and whether or not you agree with the proactive vs reactive argument I laid out above. Feel free to message me on twitter @MinaSalib09 if I can help in anyway.
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