• As MCI demonstrated, emerging providers can easily innovate and take market share from an incumbent.
• Incumbents are typically looking for higher margins and willingly give away the lower end of the market.

Incumbents have learned, much to their dismay that ever emerging providers continue to gobble market share.

Even when an incumbent does resist, their hearts just usually aren’t in it. Perhaps the reason is that the battle means life or death to the new Real Estate company or Realtor and very little to the dominant player. “It is not the size of the dog in the fight. It is the size of the fight in the dog.”

For example, banks used to originate and service all loans. Unfortunately today, with the help of technology, specialist providers now own a large piece of the “credit market” and are servicing new markets with lower costs while adding new complexities daily. As you, better than anyone else know, the recession of 2009 is, in no small part, a result.

Once upon a time, the print newspaper industry was the only source of “help wanted” and other advertising. Realtors spent their entire marketing budget with them. Then, along came monster.com and Realtor.com followed by craigslist.com and others. Newspaper classified advertising space has shrunk. Due to Amazon.com, traditional bookstores are no longer the only place to buy the latest best seller.

In every case, the incumbent was aware of the technological threat and eventually reacted to it with a “me too” version.

• Classified newspaper ads are now available on line.
• You can purchase a book from Barnes & Noble electronically.

But is it too little, too late? Only time will tell. In the 1990s, IBM sought to leave networking equipment in order to focus on higher-margin services. Cisco saw an opportunity and captured the market. In the meantime, Dell took advantage of the modular nature of the personal computer industry. IBM, a behemoth, old, integrated company, gave up a fast growing market …forever.

• What jobs are clients and prospects in your industry trying to get done?
• Are there some client segments not served, over served or underserved by current offerings?

What “bundled” products or services, like the newspaper or AT&T, can be sliced and diced by your using technology to capture a profit center?

Can you, as monster.com and Realtor.com did, just take a specific portion of a larger process and do it more cost effectively and efficiently? Can you “fly beneath the radar,” and eat a dominant player’s lunch.

If you’re the “AT&T” in your industry and marketplace, don’t assume that your “MCI” threats are insignificant. Look for ways to be first in innovation and be willing to give up “fat margins.” Be unwilling to cede the low end to new entrants and insist on new business models that are lean so you remain profitable.

As a Real Estate incumbent, acknowledge that your strengths may also be your weaknesses. Failing to do so will put you in a position of ultimate failure. Technology will change the landscape for every industry on the face of the earth and always pose threats to the current leaders and great opportunities for new entrants.

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