Tuesday, July 14, 2009

Competitive Insulation

Seth Godin blogs today, in Facts always win, right?, about something he calls competitive insulation that protects your business from commodification. It's made up of relationships and whatnot, and along with these points of emphasis, you add your story.

I think he's talking about building up a sub-culture around your product or service, which relates directly to how you might go about your brand-building. This competitive insulation is something referenced in part 4 of Cory Doctorow's (so far) excellent Makers, currently being serialized on Tor.com. The event starts in the fifth paragraph, the one that starts "Lester came back..." In it, the group has discovered their product is now being made by a competitor who's selling it for less than the group's cost to manufacture.

"How do we compete with that?" asks one member, and the answer he receives is "We don't...Now we do the next thing."

Then he goes on to explain that they will do something "even more capital intensive," and the implication here is that they are raising the barriers to entry a bit, and by moving on and coming up with something else very cool they are enhancing their story, building their brand. Cory Doctorow is the bomb-diggity.

And so is Seth Godin. I really like this term, competitive insulation.

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