Be First in Your Own Category

Here comes the singularity.

Be first in your own category is advice often given to entrepreneurs and startups. In the real world, the one with flowers and trees, business depends on the second brand to create competitive pressure. As Al and Laura Ries set out so well in their book, ‘The 11 Immutable Laws of Internet Branding,’ if there’s a Ford, there has to be a GM. If there’s a Costco, there will be a Walmart. The need for a second brand is driven by the suppliers, and by the customers. They ask for competitive pricing pressure because they want to comparison shop. If there were no second brand to compete, the dominant brand could do whatever it wants. It would be a monopoly. It would set pricing, availability, position on the shelves.

Does that monopolistic behavior sound familiar?  It should, because it’s just what Amazon is doing right now. The internet’s 900-pound gorilla has been choking off the supplies of books published by Hachette and movies distributed by Disney. David Streitfeld’s reporting on this in the New York Times …

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