This is my first post about blockchain. I have been reading about blockchain for the last one year and took few courses in blockchain both from business perspective and from technical perspective. I also learnt a lot from the book “Blockchain – The untold story” by Srinivas Mahankali. I definitely recommend reading this book to understand the potential of blockchain technology. I also did some POC on Ethereum on Google Cloud Platform and Microsoft Azure.
Before even stepping into the blockchain world I would like to provide few thoughts on how today’s business face competition. There is no doubt each company is looking to have a competitive advantage that will increase their market share, revenue and profits.
Usually the competitive advantage for the companies are their data and information, people, expertise, product and few other factors. One of the factors that is also a competitive advantage is trust. In today’s uncertain environment trust has to be built at every level of the organization and with various stakeholders like customers, employees, shareholders, suppliers and partners. I think it is easy to list the companies that lost the trust of their users and customers. Notable examples for this are all the banks that caused the 2008 global financial crisis, Cambridge Analytica, Facebook, Google and others.
Trust is a competitive advantage
The second thought that comes to my mind about competitive advantage is how Apple won in the smartphone market. Apple did not fight alone against the giants like Nokia, Blackberry and Sony. Apple built an ecosystem which consisted of suppliers, manufacturers, vendors, application developers and other stakeholders. This ecosystem helped Apple win the battle and emerge as a leader and Google followed a similar approach with some USPs for Android. Your network is your competitive advantage. In order to build such a network with wide variety of stakeholders trust is again a major pillar. Transactions between these stakeholders must be recorded and stored and should help build trust among these stakeholders.
Your network is your competitive advantage
The third thought that comes to my mind about competitive advantage is autonomy. Once an environment of trust is established for various stakeholders to run their operations on a shared platform then autonomy should be provided to the participants so that the network becomes self-governing system. One of the best examples of autonomous system is the human immune system. Scientists are still trying to find the link between the human immune system and the brain. The human immune system is able to mobilize the white blood cells to attack the pathogens of various types without much of instructions from brain. The immune system is powerful than antibiotics because it learns to attack different types of pathogens like bacteria, virus, etc whereas antibiotics mainly attack bacteria. The goal of companies is to build such decentralized and autonomous systems using blockchain.
Self-governing systems are a competitive advantage
I will share my last thought on competitive advantage through a joke. A man asked his wife what she wanted as her birthday gift. His wife replied that she wanted BMW and her second choice would be some jewelry in diamond. The man and his friend went to a fake diamond store and bought a jewelry made of fake diamond. His friend reminded him that his wife asked for BMW for which he replied “The don’t make fake BMWs”. The moral of this joke is that if you can create something that your competitors cannot duplicate easily then that can be a competitive advantage. If you can create something unique it can be a competitive advantage provided market exists for it. Blockchain helps companies create unique assets that cannot be duplicated in digital world. This is a big breakthrough. The best example is bitcoin. Lot of art assets like pictures, songs, music, videos can be protected through blockchain and help owners receive royalty.
Creating something unique is a competitive advantage
You might have also read about other factors of competitive advantage through blockchain such as disintermediation, changing the business model via blockchain and disintermediation and others. Think about these factors and come up with a strategy to shape the future of your organization. In short think outside the blocks.