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The networked idealist's advantage

The networked idealist's advantage Purpose – The authors have identified a new type of innovator that combines the rascal‐like idealism of Robin Hood with the network‐based business models of early internet businesses to revolutionize many markets. These innovators are initially non‐profit entrepreneurs who develop organic, cellular, distributed network structures to accomplish their work. They use financial, transportation and communications networks in novel ways to circumvent normal barriers to market entry. Design/methodology/approach – The authors studied the business practices and culture of a number of these network idealists. Findings – Network idealist succeed by undermining at least four of the barriers to market entry. They use networks to ramp up scale quickly. They differentiate by appealing to idealistic or radical impulses, often creating a charismatic brand in the process. They overcome capital requirements by using contributed labor and public infrastructures. And, they skirt the regulations that restrict innovation in many industries. Research limitations/implications – As network idealist organizations like Craigslist mature, researchers will need to analyze how their business model changes and develops. Practical implications – An incumbent options matrix describes four strategies available in response to network idealist competition: eliminate, join, barricade, align. Originality/value – The authors identify a new and very successful form of competition, explain its strategies, and suggest ways to counter attack. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Strategy & Leadership Emerald Publishing

The networked idealist's advantage

Alex Lowy; Philip Hood; Eli Singer
Strategy & Leadership , Volume 33 (3): 7 – Jun 1, 2005
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Publisher
Emerald Publishing
Copyright
Copyright © 2005 Emerald Group Publishing Limited. All rights reserved.
ISSN
1087-8572
DOI
10.1108/10878570510594406
Publisher site
See Article on Publisher Site

Abstract

Purpose – The authors have identified a new type of innovator that combines the rascal‐like idealism of Robin Hood with the network‐based business models of early internet businesses to revolutionize many markets. These innovators are initially non‐profit entrepreneurs who develop organic, cellular, distributed network structures to accomplish their work. They use financial, transportation and communications networks in novel ways to circumvent normal barriers to market entry. Design/methodology/approach – The authors studied the business practices and culture of a number of these network idealists. Findings – Network idealist succeed by undermining at least four of the barriers to market entry. They use networks to ramp up scale quickly. They differentiate by appealing to idealistic or radical impulses, often creating a charismatic brand in the process. They overcome capital requirements by using contributed labor and public infrastructures. And, they skirt the regulations that restrict innovation in many industries. Research limitations/implications – As network idealist organizations like Craigslist mature, researchers will need to analyze how their business model changes and develops. Practical implications – An incumbent options matrix describes four strategies available in response to network idealist competition: eliminate, join, barricade, align. Originality/value – The authors identify a new and very successful form of competition, explain its strategies, and suggest ways to counter attack.

Journal

Strategy & Leadership – Emerald Publishing

Published: Jun 1, 2005

Keywords: Market entry; Competitive strategy; Innovation; Internet

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