In the early days of my career in the luxury hotel business we used to hang our hat on perceived barriers to new competition. A magical setting with a "sense of place", exceptional service, world class cuisine... Back then we also knew the capital cost of new construction was a significant barrier. They worked to a degree for a while.
That was then. Airbnb is now. With 20,000,000 connections and counting, and a $100 million round meaning a $1 billion valuation this is formidable new competition for the traditional hotelier.
The world has gotten incredibly connected and very social. Everywhere there are tribes of people forming with no geographical boundaries - just common interests. We yearn to be connected to people in a meaningful way. Life is too short to go it any other way.
What barriers?
The magical setting may be just down the road, footsteps away, or the view from the back deck. World class cuisine is likely at our fingertips, at a trendy local haunt again down the road, or a function of a lively and engaging dinner party hosted in our new vacation home compliments of airbnb. The guests of the party are a local subset of one of the tribes we're in and we are meeting many new friends in person for the first time and we are having a blast. Exceptional service? Maybe - maybe not. But who cares. We are having the time of our life. "Have you been out on the deck yet?"
There are no barriers to new competition.
Staying relevant and protecting market share and profitability means being remarkable - memorable. For a refresher on being remarkable read Seth Godin's, Purple Cow.
It takes blue ocean strategy. So unique, so special, so remarkable it can't be replicated, or results in such a head start that major competition is not likely.
It's innovative. Innovate or die.
We live in very exciting times! Happy leap day!
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