Blue Ocean Strategy spent over 100 weeks on the bestseller lists, has sold 3.6 million copies, making it what Ryan Holiday calls a Perennial Seller.) And with good reason; millions of entrepreneurs and businesspeople have embraced the idea that carving out a slice of an existing market can certainly be effective, but finding new opportunities -- finding blue oceans -- is even better, since those gains don't have to come at the expense of other businesses or other people.
All of which sounds great -- but how do you actually pull it off?
With Blue Ocean Shift, co-authors W. Chan Kim and Renee Mauborgne answer that question, providing system and tools to help startups and existing businesses create and unlock new markets.
Sounds like a tall order, but Renee and Chan pull it off. Blue Ocean Shift is great: Practical, useful, real-world.
I talked with Renee and asked her to pretend she ran into a business owner at an airport and had five minutes to share some of the top takeaways from the book.
Here are four:
1. Disruption isn't always the answer.
Seemingly everyone that thinks of creating a new market thinks in terms of disruption, but what we found through our research is that disruption is only half of the potential pie. The other half is non-disruptive creation.
Disruption sounds great, but it's incredibly difficult. By definition, when you set out to disrupt you're taking aim at an existing market -- which means pitting yourself against large, established players that have much greater resources and reach. David sometimes does beat Goliath... but usually Goliath wins.
Plus most large companies are extremely alert to potential disruptions. They see you coming and quickly take steps to protect themselves.
At least half of the growth opportunities are non-disruptive. Like Square. Square didn't take on Visa, MasterCard, or American Express. They saw an ocean of noncustomers. Out of America's 27 million small businesses, roughly half don't accept credit cards, yet more than half of their customers wish they did. Creating a system for mobile payments let Square unlock an ocean of noncustomers.
Non-disruptive growth avoids confrontation. Why do you want to take on the big guys when there are so many opportunities for non-disruptive growth?
2. Technology alone won't create growth.
It's nice to be a tech innovator, but think about companies like Apple, Google, or Airbnb. Is technology the reason people love those companies? Is technology the reason they have unlocked markets?
No. They're successful because they match technology with value innovation.
Take Google. Their search engine is simple, reliable, easy to use, and free. Boom. Huge success. (On the other hand, Google Glass has privacy issues, looks kind of dorky, etc. The technology is not linked to value.)
Or Netflix. Users aren't addicted to Netflix because it has the best tech; they love Netflix because it provides a great experience: Easy to download, easy to use, inexpensive, great shows... without value, the technology is irrelevant.
Plus, many new markets are created without any technology innovation. Drybar created a whole new market space. Shake Shack unlocked a new segment of the hamburger industry.
Technology matters. We're not saying it doesn't. But technology is not the decisive lever. Value innovation is the big lever.
Think value innovation first, technology innovation second... and always remember they are not the same things.
3. Don't see entrepreneurship as a black box.
Where startups are concerned, it's been long accepted that 9 out of 10 ventures fail.
Don't accept that. Flip it. Shift from using intuition, gut instinct, and trial and error to using a systematic process like we lay out in the book.
Historically, quality was thought to be a black box: You were somehow born to be Chanel, or you weren't. Then Six Sigma created a process and tools... and now marvelous quality is attainable by any business. Quality isn't instinctive; there are so many tools like benchmarking, industry analysis, and process improvement that allow us to zoom in fast and get great at it.
The field of entrepreneurship still seems like a black box, but it's not. There really are patterns and processes to help you open up commercial opportunities -- why wouldn't you apply some structure to the challenge?
Say you want to understand noncustomers -- there's a tool. Our buyer utility map helps you find pain points.
We believe that in the future, 9 out of 10 businesses will succeed. It just takes the right tools, the right processes, and the right approach.
4. Never forget the human factor.
What's happening with Uber brings to light an important issue: You can get so excited about nailing the business and growing so fast... that you forget about humanness, about how all of us need dignity and pride.
People aren't carrots or sticks. That's the root of Uber's problems: Their failure to address the critical dimension of humanness.
Uber also faces a challenge we talked about earlier: Since they're aiming to disrupt an established industry, a very regulated industry, one with close ties to municipalities, other companies can not only come back at them, they can call in regulations to make it even harder for Uber.
If you're not disruptive, that doesn't happen.
Refuse to leave half of the opportunities off the table, especially since those opportunities are huge.
Value innovation unlocks markets. Make sure you deliver overwhelming value. Flip the success to failure ratio by being thoughtful, adding structure, and using the tools at your disposal.
And never forget you need people. Don't just get excited by the quality of your idea -- never forget that we all show up at work as humans. Carrots and sticks are fine, but when you violate who we are as people, when you challenge our pride, when you don't respect what we need... the quality of your idea doesn't really matter.