Knowledge@Emory writes how defining a firm’s capabilities, purpose, and niche creates competitive advantage:

Is it so different for the leader of a company to ask, “What is this company capable of?” than it is for an individual to wonder, “Who am I?” Not according to at least one presentation given at the third annual Atlanta Competitive Advantage Conference held at Emory University’s Goizueta Business School.

Joey Reiman, CEO of the ideation company, BrightHouse, and an adjunct professor in marketing at Emory’s Goizueta Business School, contends that it’s not competitive advantage a company should seek, but distinctive advantage. Finding this distinction, like finding the meaning of self, requires going within.

In a panel discussion entitled, “Recognizing Distinctive Advantages Within Companies,“ Reiman told participants he advises company leaders to look inside their firms to find capabilities—not outside. “The best way to find one’s own capabilities is to ponder on them—go deeper—not wider,” says Reiman, who has advised company leaders at firms like The Coca-Cola Company and The Home Depot.

WSJ writes about something we should have been doing in India:

Indonesia's rapid adoption of cutting-edge cellphone technology for Internet access is helping Southeast Asia's largest economy to catch up with its technologically savvier neighbors.
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HSDPA technology, pioneered in Indonesia by PT Indonesia Satellite Corp., or Indosat, offers Internet download speeds at least six times as fast as connections relying on cable, a wider difference than in a more-developed economy. And because it's an add-on to 3G technology, it doesn't need any major new telecom infrastructure -- just some equipment attached to existing mobile base stations.

The New York Times writes:

Money spent on computing technology delivers gains in worker productivity that are three to five times those of other investments, according to a study being published today. But the study also concluded that the information technology industry itself was unlikely to be a big source of new jobs.

The 69-page report is a wide-ranging look at the role that information technology plays in the economy, based on an assessment of existing research and the authors’ analysis. The study was done by a year-old research organization, the Information Technology and Innovation Foundation, whose work is supported by companies like I.B.M., Cisco Systems and eBay, as well as by the Communications Workers of America and foundation grants. It will be available at www.itif.org.

The study concludes that the economic significance of information technology is less in the technology itself than in the capacity of computer hardware, software and services to transform other sectors of the economy.

The New York Times writes:

The best and the brightest from leading business schools are pelting energy start-ups with résumés. And, of course, there are entrepreneurs from all backgrounds -- but especially former dot-commers -- who express a sense of wonder and purpose at the thought of transforming the $1 trillion domestic energy market while saving the planet.
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The energy boomlet is part of a broader rebound that is benefiting all kinds of start-ups, including plenty that are focused on the Web. But for many in Silicon Valley, high tech has given way to “clean tech,” the shorthand term for innovations that are energy-efficient and environmentally friendly. Less fashionable is “green,” a word that suggests a greater interest in the environment than in profit.

Josh Kopelman writes:

The truth is that early stage ventures are all about experimentation and iteration. As soon as it's written, every business plan is wrong. Good entrepreneurs recognize this, and tend to build agile teams that can quickly respond to early market information in order to identify a real business model and minimize risk.

A necessary side effect of all this experimentation is that most startups will ultimately fail. While the mythical "90% failure rate" has been disproven, I would venture to guess that for technology based startups the failure rate is still extremely high. That's just the nature of the early stage venture world, and ideally it allows the entrepreneurs involved to apply their hard-earned lessons towards more productive ventures. Or, as Jeremy Liew aptly put it: "Companies die, founders and employees learn from the experience and move on, and hopefully start more companies. I for one would love to see the second acts from the teams that are newly freed up."

As I started reading the book (and am still doing so), I related it to some of my own decisions over the past few years. What Michael Raynor says in “The Strategy Paradox” made sense – and could even perhaps account for some of the failures that I have experienced over my fifteen years as an entrepreneur. I like to make bets about the future and think of ‘blue oceans’ that I see as potentially uncontested marketspaces.

In making these bets, I construct a vision of tomorrow’s world. And perhaps, that is the problem -- “a” vision. If I am too early or if that future does not pan out, one has to face failure. Perhaps, I should look at some hedging of bets going ahead. In an entrepreneurial venture, this is also not easy because they are multiple constraints.

A recent example from Netcore can help illustrate the importance of the need to create multiple scenarios for the future. A year ago, we were only focused on the mobile Internet and even created a mobile portal. But usage has been low for multiple reasons – the low activations of GPRS in India, the need to pay higher charges to go outside operator walled gardens, the lack of awareness about our portal, and so on.

At the same time, a group within Netcore decided to also focus on various interactive SMS services. I wasn’t that excited about these services given the limitations of SMS. But I let the development continue and we proceeded to launch many of these services late last year. As it turned out, we have seen rapid growth in these services – contrary to my initial expectations. In fact, we are now also seeing these services help drive the growth of the mobile portal.

While we did not follow Raynor’s framework and made decisions more based on instinct, I can now see the usefulness of bringing in some of the ideas described in his book in my mental models. Big bold bets definitely need to be made, but also thinking through (and perhaps creating solutions for) some alternate scenarios may be the smarter approach going forward.

Next Week: Good Books (continued)