Geoffrey Moore: Neutralizing Competition is a Speed Game

Neutralization means, you know, the world's progressing, competitors are innovating, and now all of a sudden, it's my job to get back inside that yellow circle because I've kind of fallen out of favor, you know, and I've got to at least get. I don't have to try to beat the blue asterisk. I just got to get my asterisk back inside, back in gear, as it were, you know, and so refocus, refocus. And once I get inside there, then I can talk about my differentiation again. But if I'm missing, if I'm still out here, the. The market won't talk to me at all. They'll say, well, you're not even qualified to be in the conversation because you haven't met the minimum table stakes to be in this game. So failure to neutralize. There are some real cautionary tales on this one. So Microsoft brilliantly neutralized the Mac with Windows, but Nokia. Did you see the memo from Steven Elop? A couple. I guess it was last month or the month before. There's a sentence in that thing. He's the new CEO of Nokia. He writes a memo that's a public memo to the world which says, how is it possible that Apple came out with an iPhone in 2007 and Nokia does not have a response? Would you want to answer that question? Gee, Stephen, I wasn't the product manager, okay? But the point was. So ask yourself why? Well, why do you think? I don't know. But my bet is because the engineers at Nokia were too proud to neutralize, because they wanted to differentiate. They wanted to overleap the overleaper. And when you do that, you leave year after year after year of no effective response in the market, which is absolutely fatal. Microsoft in the Web. Remember when there was the memo with Bill Gates, we're a software company. We're not a Web company. And then it was like, oh, no. And then it was like, he immediately neutralized Netscape Navigator. Now, Internet Explorer 1.0 was a farce. It was a pathetic attempt to pretend it was a browser. The second release, not much better, but the third release, better than Navigator 3.0. So Microsoft actually was a brilliant neutralizer. Lotus Notes did not make the same kind of response. Lotus Notes kind of went inside the IBM world, and it's kind of doing its General Motors thing. Netflix, Netflix with the Web. Didn't you think, when all of a sudden stuff is coming over the Web, you think, well, that's the end of Netflix, right? Netflix is a CD, not so Mr. Hoffman is still the scourge of the media industry. He is Conan the Barbarian they hate. I mean, they would just like they would look to assassination. Well, I won't go into assassination. Not this week. But anyway. But they're thinking about it. Okay, but Blockbuster, when Netflix came out, Blockbuster just stood there like a deer in the headlights and charged more for late stuff. Google Apps versus Microsoft Office. Google's not trying to beat Microsoft Office. It's just trying to annoy them. It's just trying to keep them busy and to kind of keep something going. Right. Yahoo, on the other hand, was more like Nokia. Yahoo wanted to overtake Google Search. It was kind of like Captain Ahab and the white whale, you know? And it was a quest and it was a fatal quest. And so what Carol had to do was get in and sell off the business because she had to free her company's future from the pull of the past. That was a really, really important thing for her to do. Apple and Kindle. So what did Apple do with Kindle? It co opted it. Kindle. Most people read their Kindle books on iPads, right? Because they co opted it. Okay. Whereas the borders and their thing. No. And borders. Okay, next. So the game here is catch up fast and assimilate the innovation. It's a game of speed. It's how fast can you do it? How fast can you become good enough?