Gates, Grove, and Jobs operated in a new competitive environment. At the peak of their leadership, the combined market cap of Microsoft, Intel, and Apple was $1.5 trillion. They were the first to identify and successfully compete from building platforms instead of focusing on individual products. Platforms take advantage of network effects, which in turn, create stronger and stronger platforms.
Today’s competitive landscape must cope with platforms, network effects, and shifting tech trends across more industries than just the tech sector. A competitive strategy must consider moves against a platform company or moves to create a platform and nurture an ecosystem to strengthen platform.
“They focused not just on building products, but on creating and controlling platforms for third-party innovation and supporting ecosystems of complementary products and services.”
― David B. Yoffie, Strategy Rules: Five Timeless Lessons from Bill Gates, Andy Grove, and Steve Jobs
- Look Forward, Reason Back
- Make Big Bets, Without Betting the Company
- Build Platforms and Ecosystems
- Exploit Leverage and Power
- Shape the Company Around Your Personal Anchor
Strategy Rules, rule number two mirrors in many was the idea explored by Michael Raynor in Strategy Paradox. Bill Gates used cash to invest small amounts in a potential future. Xbox, MSN.com, and other investments allowed Mircosoft to have options on the future and make strategic moves as the future unfolds. Strategist focused on the rules outlined around creating platforms could miss the next future platform without also pursuing several options. In the face of unavoidable uncertainty, the future still requires a commitment. The solution, according to Raynor, set up multiple parallel options. This gives you the flexibility to choose the winners as the future unfolds.