Ask HN: Competing with the crowd and not becoming RIM. | Hacker News Reader

Ask HN: Competing with the crowd and not becoming RIM.

5 pointsdying_business3 comments

I work in a content industry that is in a massive revenue transition. Our old very profitable customer base is moving to newer sources of content that are much cheaper to produce than our internal costs. The quality is nowhere near the same standard but the new market segment doesn't need high quality, the barrier to good enough is getting close. The writing is on the wall although likely 18-36 months out. I don't want my company to be another RIM/Palm/Motorola disaster that just ignores the problems. We're working on automating as much as possible to reduce our own internal costs but there is a limit to lowering our costs.

We're about to be stampeded by the crowdsourced companies using nearly "free" users/workers. So how do we survive and thrive in the future? I'm hoping to hear from others in similar scenarios. This is the same issue of newspapers, radio, etc...

So far we are considering: 1. Moving from a customer paying model to an advertising model. 2. Creating an eco-system around us to provide our content in new forms. (P.S. Sorry for the throw-away email)

If you're not familiar with the "Innovator's Dilemma" read/skim the book ASAP (http://www.amazon.com/gp/product/0060521996/) for it sounds like that's what your company is facing.

It'll be really hard to survive, at least that's what history says as of when Clayton Christensen did this book.

I'll also give you some advice obtained from watching my father over the years: one key thing is to realize when you've got to sell your company or shut it down in an orderly fashion. A whole lot of people would be a lot more wealthy if they'd not ridden their companies into the ground; at least you've realized your predicament and will avoid a controlled flight into terrain crash.

I was just about to recommend that book as well. In my opinion, it's a must read for every entrepreneur. It made me realize a few very important things.

Clearly, Netflix's CEO understand its principles and Blockbuster's CEO didn't

Lowering costs to compete with the near free alternative makes your company a poor competitor in comparison to them. This is because you have much higher costs and probably are not sufficiently different to justify it.

Options: 1. lower costs and essentially adopt the crowdsourced model 2. increase costs and quality and sell a premium product

Either way, the main thing is that you have identified that you do not want to tread water.

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