William Munney wrote:
Our model is not heavily disruptive like BEST were and SWITCH are.
How is being competitive on price by cutting out people in the supply chain disruptive - it is economic competition? If you gave kitesurfers the choice of buying direct from the manufacturer at 60% of retail or buying through a shop and distributor chain which do you think they would chose?
Disruptive is not a negative term in this context- it is used to describe new technologies/distribution methods that change an industry.
Yeah, I prefer to call it model innovation. Others call it 'blue ocean' in the business world. The idea is that you should not attempt to compete directly with the larger companies. That is shark infested waters, or red water. Most people think that to find the blue ocean you need better product innovation. This simply is not true. Product innovation is the most difficult method for staying in blue water. As soon as the new product goes to market, the larger companies jump in to get a piece of the action. Continued product innovation is very difficult and very expensive.
Take the Cloud kite as an example. Great product innovation and fundamental change in design direction. By the time it hit the market, two other big brands were getting ready to launch a directly competing product. There isn't another readily available dramatic fundamental change to move to from there for them. A small company can typically differentiate through product innovation once, or maybe twice before they are back competing in red water again.
Conversely, business model innovation is simpler and less expensive. The idea is that you are not hemorrhaging money in a huge R&D project to try to make a better mouse trap. You are figuring out a different way to get the trap to the consumer. Small companies typically do this better than large companies.
Carefully consider the market. What are the various consumer segments? What are the different value propositions for each segment? Try to differentiate through business model innovation rather than product.