Brilliant. A slight nuance to the General Mills case study. As with physical goods and as with brick &mortar retail environments, taking up the most shelf space was an effective strategy for preventing entrants. However, consumers became overwhelmed with choice which would backfire. It continues to be that 5 - 7 choices is an ok heuristic. Makes sense given how we know memory works.
When it comes to app layer, I agree that specialization and smaller snack size apps is a likely way to go. In my experience, many C-Level leaders keep looking for vertical, sub vertical experience from their new suppliers. So depending on how the sub vertical is defined, it can be quite a niche app.
If we stick to thr FMCG analogy, I'm curious whether firms will take the P&G route of best in breed for every sub category in their portfolio or take the Reckitt route which has been criticized in the past for not really managing a portfolio but rather than buying, exploiting and selling brands.
I'm curious if there is a nuance I'm missing that makes more sense for the app layer.
This is a very solid prediction. I’ve been thinking for years that lowering development and marketing costs will lead to lots of small (sub-$25M revenue, maybe sub-$5M revenue) lifestyle software companies. I’m already seeing that happen. The idea of larger companies with bigger brands segmenting their offering in order to block out such entrants is interesting. Are we seeing any firm already doing it? Salesforce sort of does it with their Industries strategy.
Another potential response from big firms (including Salesforce) would be to nurture their own ecosystem of niche vendors who just configure the platform solution to meet the needs of smaller segments. That also already happens. But maybe AI and lowering costs mean those firms don’t need the platform as much.
Ha! I wasn't sure where you were going with this. But great points and very plausible.
Brilliant. A slight nuance to the General Mills case study. As with physical goods and as with brick &mortar retail environments, taking up the most shelf space was an effective strategy for preventing entrants. However, consumers became overwhelmed with choice which would backfire. It continues to be that 5 - 7 choices is an ok heuristic. Makes sense given how we know memory works.
When it comes to app layer, I agree that specialization and smaller snack size apps is a likely way to go. In my experience, many C-Level leaders keep looking for vertical, sub vertical experience from their new suppliers. So depending on how the sub vertical is defined, it can be quite a niche app.
If we stick to thr FMCG analogy, I'm curious whether firms will take the P&G route of best in breed for every sub category in their portfolio or take the Reckitt route which has been criticized in the past for not really managing a portfolio but rather than buying, exploiting and selling brands.
I'm curious if there is a nuance I'm missing that makes more sense for the app layer.
This is a very solid prediction. I’ve been thinking for years that lowering development and marketing costs will lead to lots of small (sub-$25M revenue, maybe sub-$5M revenue) lifestyle software companies. I’m already seeing that happen. The idea of larger companies with bigger brands segmenting their offering in order to block out such entrants is interesting. Are we seeing any firm already doing it? Salesforce sort of does it with their Industries strategy.
Another potential response from big firms (including Salesforce) would be to nurture their own ecosystem of niche vendors who just configure the platform solution to meet the needs of smaller segments. That also already happens. But maybe AI and lowering costs mean those firms don’t need the platform as much.