Of the crooked timber of humanity

A couple of people close to me recently told me that I’m too ‘straight’ to succeed in business. It felt like a very sudden, very cold shower. I could remember a time when I was much younger and had heard similar advice being given, probably to some older cousins embarking on their first careers. It had struck me as such a deep truth back then. How could you possibly compete and succeed in a cutthroat world if you weren’t willing to step on, or do worse to your competitors, even partners. From speaking to other entrepreneurs, this seems to be an idea that survives, even to this day. I can’t remember the source anymore, but I believe it to be true that cheating tends to pay off when 3 conditions are met:

1. The industry is a Zero sum game. It’s a zero sum game if consumers will only buy 1 unit of a product. For instance, smartphone makers play a zero sum game, whereas developers for each platform do not. We see lawsuits between smartphone manufacturers as they battle for your dollars, but we don’t see a similar battle being fought for the software, even in as competitive a niche as games. One of the main reasons is clearly that you can keep and play multiple games on your smartphone, but you won’t generally have multiple smartphones.

2. Growth vs stagnant or shrinking market. CDs are a shrinking market. Tablet computing devices are not.

3. Little or no IP A great deal of proprietary technology goes into the manufacture of tablet computing devices. Comparatively little proprietary technology is involved in say the F&B business. Crappy restaurants often die a quick death, while companies like Nokia and RIM are slow to fade, even when they are eclipsed by innovative competitors with newer technologies.

I think that these are the most important factors in general. If we’re interested in competing in the same established industries that our parents spent their lives working in, perhaps we could be forced by circumstance to adopt business practices that we would shy away from telling people, but I don’t believe that to be the case for technology. Do you?