The Difference Between Competitive Advantage 1.0 And Competitive Advantage 2.0
Business on the internet is extremely competitive, much more competitive than the offline business world, in my view. In fact, it is about as close to perfect competition as a market can come. This makes it very difficult to create any kind of a sustainable competitive advantage in the Web2.0 world.
In the world of Web2.0 there are practically no barriers to entry and many of the tools to create a Web2.0 site are free commodities. Everything is out in the open and any one of your competitors can look at your website and copy its design, hire a coder to duplicate its look, use any freeware applications, etc. And anyone, anywhere in the world can quickly start an online business in under an hour, for little or no cost.
In other areas there are obvious exceptions to this, companies like Google have proprietary technologies and have established such a dominant position that it is hard to imagine them being overtaken. But as far as Web2.0 goes it can be considered close to perfect competition. Yet for those who develop sustainable competitive advantage in the Web2.0 world the rewards are tremendous.
In short, the only way to create a sustainable competitive advantage in the World of Web2.0 is through consistent applied creativity and innovation that in some way adds value which causes consumers to give you their attention.
In the world of business, a traditional, or 1.0, competitive advantage is generally defined as a condition that enables a company to consistently earn above average profits. A competitive advantage 2.0 can be defined as a condition that enables a Web2.0 site to consistently earn more attention from the consumer than its competitors.
In the realm of 1.0 competitive advantage, we saw that organizational culture was the only true source of long term sustainable competitive advantage. In the realm of 2.0 competitive advantage, the only true source of sustainable competitive advantage is applied innovation and creativity that arises out of individual culture. This is because of the nature of Web2.0. Web2.0 is concerned with the individual who is at the center of a network, all the while giving and taking value from that network. At its simplest level, adding value means doing or providing something that makes consumers lives better. –Darryl Dosti
Competitive Advantage 2.0
The term “competitive advantage” has traditionally been associated with the world of business, but this is no longer the case. Competitive Advantage 2.0 is all about the individual human being in the new economy. Information technology, the internet, and globalization have increased the level of competitiveness dramatically in all areas of life. But at the same time, these forces have empowered those of us who understand how to leverage who we are as unique individuals in this environment.
In general, the term “Web2.0” usually refers to a social network or community. But it is really about the empowerment of the individual and what value he or she can add, or receive from, a community or niche. Web2.0 is just one aspect or effect of the powerful broader trends that are present in our world.
The dramatic changes that have been taking place in the world over the last 20 to 30 years demand that you, as an individual human being, learn to bring out the best in yourself. By doing this, you add value not just to yourself, but also to a community, a marketplace, and the world in general.
Although it is obvious to most people that the world has been experiencing tremendous change, few understand the implications of this change. When we step back and view the socioeconomic trends from a broader context, it becomes evident that the traditional means of becoming successful are no longer sufficient.
Knowledge, determination, and positive thinking are no longer the main determinants of success. They have become mere entry level requirements – still very necessary but now just an entry fee to play the game of life, a mere common denominator among the majority of the world’s population. And this has caused a lot of frustration for people in our world.
The bar is continually being raised everywhere. Information technologies and globalization will continually to dramatically impact our lives, and the world will continue to become more competitive. But, like a frog in a slowly heating pot of water that will eventually boil, at the individual level many people do not realize the significance of the broader trends.
Yet there is tremendous opportunity available to those of us who understand the trends and know how to utilize them. By aligning our strategies for success with the broader trends and utilizing our individuality, we can prosper. To benefit from these trends we must bring the concept of competitive advantage down to a personal level.
Many interpret the competitive forces at work in today’s world as being negative in nature, and having negative consequences. I hold the opposite view.
Increasing competitive forces at the level of the individual human should be seen as positive and embraced. The forces at work in today’s world are demanding that we explore and apply our “individual culture” in a way that creates a “Competitive Advantage 2.0” that adds value to the world and earns the attention of consumers in the Web2.0 world.
The potential end result of this is, I believe, a happier, more positive, and more peaceful world. But to reap the benefits from the ever increasing levels of competition in our world it is required that we learn to leverage who we are as unique individuals to whatever in life we are passionate about. This is what the people that our society considers to be successful have done. This is particularly important for Internet entrepreneurs to understand because we add new value to the marketplace through innovation and creativity. –Darryl Dosti