In business school I learned that money, quality and speed were the main competitive advantages. And yes, probably talent was somewhere in the mix as well.
Lately I have been thinking that, whereas these are certainly competitive advantages they are not so important anymore. Also I would argue that they become increasingly less sustainable.
- Money: There is an abundancy of money around. A competitor could go for a serious “money/resource war”. Look at the Samwer brothers for example.
- Quality: (Product) quality is certainly a more long-term strategy. Nevertheless, to a certain extend (product) quality can be copied. Look at China. Eventually certain quality criteria become basic/expected features and loose their “advantage”. The only strategy against that is innovation. Companies that don’t innovate will eventually end up competing on price.
- Speed: Speed is – especially in the web economy- probably the most important one of these three. However, timing is important as well. It doesn’t do any good to be the first to be in a market that nobody cares about (yet). Also it shows that quite often not the first one in the market ended up winning it. Look at Friendster.
I believe in the age of increased transparency the above competitive advantages still matter. However, transparency fosters one competitive advantage which is hard to beat: trust.
Trust is very valuable. Yet, trust cannot be bought. The process of gaining trust is also very hard to speed up. Why? Because trust uses the only resource that is not scalable: time. That makes it a very sustainable competitive advantage.
Next to the time factor, gaining and maintaining trust is a lot of work. Maintaining it probably more so, since trust is a process and not an event. It builds on predictable and consistent behaviour. This is why authenticity and stability breads trust.
Obviously customers. employees, investors etc. will trust you if you are doing the right thing. Trust grows if you do it again and again. And this is only possible if you are truly passionate and if you do genuinely care.
Maybe it is a good idea to build your next business idea on trust as a central competitive advantage. It might not be easy but it may be very valuable in the long-run.
Above all, working in a trusting environment certainly feels good for everyone involved. And it is hard to argue against maximizing happiness.