Tag: competition

Angles & Dry Docks

“Wait,” I said, “You’re a software guy. How did you end up building ships?”

Last night, I was at a happy hour with the Rotary Club and struck up a conversation with a retired entrepreneur. He told me how he started in Silicon Valley, made a bunch of money in software, then bought a ship building business, and then went back into software and services before retiring.

The sandwich of software and huge transportation vehicles piqued my interest so I asked how he had made this transition?

He explained that flush off the success of a VC startup, him and a friend began asking around about businesses that they might acquire. They knew an attorney who heard of a business in the local shipyards that was on the verge of folding. They raised a little money from investors and put in a lot of their own money and bought the business.

“What’s your criteria for buying a business?” I asked.

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Using Horror Vacui to Innovate

If you walk through a forest, you’ll see a limited number of species of trees.  Depending on where you are, this will probably be smaller than you can count on your hands.  Why aren’t there more?

There are only so many resources in a patch of earth that a tree can use to grow.  Each of the species uses different requirements and advantages to compete for and use the available real estate in a forest.  Where the edge of one species advantages end another species begins.  For example, one needs a lot of sunlight and won’t grow in the shadow of a hill where another grows best with shade.  

For each of these categories of context, a species survives and reproduces the best.  This results in them dominating that spectrum in the forest.  They fit best there.

The market is the same way.  The resources and energy available in the market pull solutions into existence to address the available contexts.  Horror vacui or “nature abhors a vacuum,” is how Aristotle described this effect.

If there is a market, there will be a limited number of kinds of solutions in it with dominant market leaders.

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