Tuesday, January 5, 2010

The Incumbent and the Challenger

For a startup business, there's nothing more necessary than heterogeneity - your niche, your market opportunity, that little difference that gives you the edge. You stick your wedge in and start hammering - differentiating. If things pan out right, if the risks pay off, you'll carve yourself a space. You'll convince as many people as you can that it's better 'over here'. You'll compete, you'll make your space sweet and attractive, you'll advertise and persuade. How excellent it would be if everyone came 'over here'. Consolidate. And in time, with success, your niche becomes a chasm, and the last thing you need is some upstart calling everyone to somewhere else.  You are now the incumbent.

Life as the incumbent is a different world. It's go steady, be loyal to your customers, stay on message, don't take risks, react. The world as a homogenous market for your product is the holy grail, and you yourself are proof that you can neither attain nor retain it.  Rising entropy is just what you need.

It's not just business - its anything you care to name:
Opponents tend to bet more aggressively against you and make risky plays in the hope of scoring big against the champ. So you need to play more conservatively and protect your chips.
In politics, the incumbent talks of security, while the challenger calls for change. In sport, the tactics and strategy of the most successful are mimicked - but it is the challenger that plays differently who succeeds in toppling the champion. When you are young, you take risks - everything is new - you are the startup business.  As you get old you homogenise - your perspective is much the same as it was five, ten, twenty years ago. You play it safe - there's more at stake.

An interesting example of incumbent homogeneity being challenged is genetic mutation - very useful stuff. Evolution is the process of choosing the successful challenger - biological, cultural, political, technological and more. The challenger is the wellspring of diversity and the only means we have to reduce entropy - but it is a never-ending battle, for the successful challenger's destiny is to become the incumbent.

In the process of cultural evolution, a new meme is at first both strange and wondrous - but it begins to homogenise in our cultural consciousness as soon as it is born.  It's a pattern observed in many places, and as we become the borg, the patterns of our cultural evolution will become less diverse - we will begin to evolve as one. Resistance is futile.

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