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December 2011
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February 2012

What Is Competitive Advantage?


Terminology like competitive advantage, differentiation and value creation tend to get overused in businesses. This HBR piece on the work of Michael Porter from Joan Margretta who worked with him for almost 20 years succinctly captures how often such terms are misappropriated ("Competitive advantage, for example, is often used to mean 'anything we think we're good at'. Any plan or program is called a strategy. Managers confuse differentiation with being different…most companies think they have a strategy when they don't"). It pulls together a list of Porter insights that are so pithy I'm going to re-produce them in full:

  1. Competitive advantage is not about beating rivals; it's about creating unique value for customers. If you have a competitive advantage, it will show up on your P&L.
  2. No strategy is meaningful unless it makes clear what the organization will not do. Making trade-offs is the linchpin that makes competitive advantage possible and sustainable.
  3. There is no honor in size or growth if those are profit-less. Competition is about profits, not market share.
  4. Don't overestimate or underestimate the importance of good execution. It's unlikely to be a source of a sustainable advantage, but without it even the most brilliant strategy will fail to produce superior performance.
  5. Good strategies depend on many choices, not one, and on the connections among them. A core competence alone will rarely produce a sustainable competitive advantage.
  6. Flexibility in the face of uncertainty may sound like a good idea, but it means that your organization will never stand for anything or become good at anything. Too much change can be just as disastrous for strategy as too little.
  7. Committing to a strategy does not require heroic predictions about the future. Making that commitment actually improves your ability to innovate and to adapt to turbulence.
  8. Vying to be the best is an intuitive but self-destructive approach to competition.
  9. A distinctive value proposition is essential for strategy. But strategy is more than marketing. If your value proposition doesn't require a specifically tailored value chain to deliver it, it will have no strategic relevance.
  10. Don't feel you have to "delight" every possible customer out there. The sign of a good strategy is that it deliberately makes some customers unhappy.

I'll admit there were a couple here that made me do a mental double-take (in a good way). I'm curious to know what everyone here thinks of them.

Image courtesy


It's a day of many voices of protest across the web (even on the Google homepage), but I didn't want to post about anything else today. I don't believe that censoring the web is the right thing to do and I don't believe SOPA and PIPA are the right way to end piracy. So for what it's worth I'm adding my voice to the many calls to vote no. If you are one of my US based readers, please consider signing the online petition.



I'm loving Instagram's weekend hashtag project. It's a simple but rather lovely curation of Instagrams around weekly themes that have included stairs, reflections, corners and shadows. Ages ago, I started hashtagging a few pictures that I took with #lookupmore. It's a simple thing really. Rushing about every day, I think it's easy to only look at the stuff we see at eye level or what's down at our feet. This is a way of reminding myself of all the good things you see when you occasionally pause, lift your head and look upwards. Since I started posting on the hashtag, a few others have used it too, which is nice. So any suitable Instagrams you'd like to add to the group would be lovely to see.

Massive-Scale Online Collaboration

I caught up with the super-smart Richard Sedley yesterday and he pointed me at this astounding TEDx talk by Luis Von Ahn, who was one of the people that invented the CAPTCHA. Luis talks about reCAPTCHA, the project to create human gain from the 200 million CAPTCHAs that are solved by humans around the world every day and apply all those millions of tiny actions towards helping to digitise old books (apparently over 10% of humanity have so far helped digitise human knowledge).

As if that weren't amazing enough, he then goes on to explain his subsequent work to create a product in which millions of online users around the world work together to translate the internet as they learn a new langauge. For free.

What's so fascinating about these ideas are the models and economics they are based on. The indirect but not insignificant benefit that can come from millions of actions from millions of people at a scale uniquely enabled by the internet. Fascinating.

Intimate Networks

Since its redesign, Path has gotten a lot of attention. Many would say that having created a ground-breaking piece of mobile UX this is deserved. I've had Path on my phone for a good while but not really used it. The redesign has tempted me back to play around with it, but it's not yet something I open up regularly, partly because I'm not sure what place it has in amongst all the stuff I use on a daily basis. That may change, but for now that's how it is.

One of the interesting things about it though, is that it was designed from the outset to be an intimate network. When it began, the number of people you could friend on it was capped at 50. They've since relaxed that limit to 150. But they're still clear about where that reasoning comes from:

"We are inspired by Professor Robin Dunbar from Oxford University, whose research delves deeply into the number of trusted relationships humans can maintain throughout life. We tend to have 5 best friends, 15 good friends, 50 close friends and family, and 150 total friends. At Path, we're building tools for you to share with the people who matter most in your life."

Whilst Facebook, they say, is primarily about sharing with all of your friends and acquaintances and Twitter is primarily about public sharing, Path is about creating "a safe, intimate, judgment-free space". 

Much was made of this when it launched but if I'm honest, I didn't really get it. Since then though, I've been enjoying the relative intimacy of Instagram and Google+. That's not to say that more connections and more 'noisy' networks like Twitter are inherently a bad thing (although I do have my reservations about so-called frictionless sharing on Facebook), but perhaps it does suggest that there is definitely a need for places to go where there is more signal and a little less noise. Path may not be it (I'm still not using it after all) but the functionality on the big unrestricted networks isn't perfect either so who knows, maybe it will turn out that it is.