Recently I’ve been receiving an average of two consulting requests per day from expert networks like AlphaSights, Apex Leaders, GLG, Guidepoint, and Tegus. Occasionally I agree to a 60-minute engagement, although never about my current company or industry. Doing so keeps me sharp and has sometimes resulted in new relationships with investors.
By far the number one area of questioning is around whether or not a particular market development, actual or hypothetical, would represent an existential threat to the business.
For Atypon (scientific publishing content delivery software) the question is about the (hypothetical) decline of peer review or the (real) emergence of open access, and for Smartling (language translation technology and services) it’s about (real) advancements in machine translation. Along the same lines, a well-known legal operations professional recently suggested that the (hypothetical) decline of the billable hour might be Brightflag’s (and its competitors’) existential threat.
What I say in response is that these companies have successfully evolved in the face of changing market conditions. Atypon has added capabilities to its core product that support open access, and has diversified its product suite to include tools for authors and researchers, who are not impacted by open access in the same way. Similarly, Smartling has evolved its core product to enable its customers to leverage a variety of translation options, including machine translation, depending on circumstance. I’ll spare you my thoughts on the billable hour, because this isn’t a blog post about legal pricing or technology; suffice to say, the same logic applies.
All companies are susceptible to changing market conditions, but for most technology companies the existential threat is a fast-moving competitor. For example, there was no fundamental market shift that drove Zoom’s growth over Webex; they simply moved faster and built a (much) better version of the same product. Closer to home, Atypon was caught off guard by a fast-moving competitor, although they turned out to be a flash in the pan. Smartling now is under pressure from a number of fast-moving competitors. Today Brightflag is the fast-moving competitor, but I’m always mindful of the possibility that another company could move even faster.
A startup’s ultimate competitive advantage is its speed. Remember this, act on this, and you can overcome almost anything.