Gatekeeper as a Trojan Horse in Your Business
There is an an old joke with the doorman claiming to be the most important person in the building: without him opening the door, nobody could get in the building. In that context, the doorman indeed has a point. Imagine what happens if one day, the gatekeeper decides to stop working for you.
The pattern is simple. Your business has access to their customers through a middleman and overtime relies heavily on the middle man. This is a weakness in your business strategy because the middleman has become a gatekeeper to your customers. Not only you have little to leverage during negotiation, but if the middleman wants to enter the market, he has already successfully planted a Trojan horse in your territory.
In this post, we will examine a few use cases, in which the gatekeeper successfully muscled his way into a market using his Trojan horse. This horse can take many forms: a shopping mall, a search engine, an operating system, a platform or simply an app.
Use Case #1: Google Search
We can start out with a classic example: Google Search. After years of polishing a product to become our default habit, Google started promoting its own products, among which is Google’s Zagat vs Yelp. Another recent example I want to point out: if you google “Lyrics [a popular song]>”, lyrics from Google Music shows up as the 1st search result with a preview. Lyrics websites can have a few comments about how their traffic drops after this “tweak”. Enough said and I’m not going to belabor this case further.
Use Case #2: Microsoft and Windows
Backtracking a few years earlier, we have Microsoft using Windows as the gatekeeper to elbow out Netscape and promote Internet Explorer. An average user would not bother installing another browser if Internet Explorer is just one click away on the desktop. We all have seen how it played out. Similar to #1, I’m not going to belabor this case further.
Use Case #3: Brick-and-Mortar Retail
My favorite use case is in retail: Walmart, once established itself as a go-to place for [enough] shoppers, started placing its own “Great Value” products next to the common items on the shelf, and “Great Value” items are always priced slightly lower. Products with low brand loyalty will be first in line to be replaced.
Recently taking from the same playbook, AmazonBasics is a similar alternative for common products. This is low hanging fruit for Amazon, but whether it is the best place to spend its attention is another debate. Amazon can look at Walmart as a lesson, and this topic is beyond the focus of this post.
Use Case #4: Apple and iOS
It is hard not calling out Apple’s iOS as gatekeeper to app ecosystem. How many times have you mistakenly selected Apple Map instead of Google Maps from iOS search?
What we have seen so far is whoever owns the platform gets to dictate the future. Zuckerberg, predicting VR as the next platform, has aggressively acquired of Oculus. As for the coming near future:
Use Case #5: Alexa
Alexa, the darling of 2016 and 2017, has a huge implication on retail and search. We can watch how this rolls out as Google, Apple and others start jumping in to protect their turf against the gatekeeper.
Among Alexa’s casualties, Spotify vs Amazon Music is an interesting frenemy case, especially once “music” itself becomes a Trojan horse (see coming post Music as a Commodity, or ‘The Day The Music Died’).
Use Case #6: Google Maps and Ride Hailing Services
Recently we can use Google Maps app to hail a car from multiple ride hailing services. Not only Google can collect precious data on ride sharing, but if Google successfully establishes its app as another way to hail a ride, the next reasonable scenario is Use Case #1 and #3: Google’s Waymo(?) would be promoted along side with other big names with a slightly lower price tags.
Examples for gatekeeper as a Trojan horse are plentiful, and readers can freely explore on their own (and please share with us). Many lessons can be drawn from all these use cases, depending on who you are. I can offer a few.
- If a business relies heavily on a single source for traffic referrer, its future is on the whimp of the referrer. A prime example is websites for song lyrics.
- In the pursuit of growth, one way to enter a market is to leverage the position of a referrer. A prime example is how Facebook propelled its Videos product to popularity within such a short amount of time.
There is an old joke about the doorman claiming to be the most important person in the building. This time, you realize that he is no longer a doorman, he is Mr. Gatekeeper.
Additional use cases:
- Facebook with Facebook Events, Facebook Videos etc.
- Messaging with Facebook as a clear leader.
- AWS offering Amazon’s in-house software alternatives.
- (please share your own use cases)
Disclaimer: Opinions in this post are my own.
