Skate to Where the Money Will Be?

This article states that when a product or service does not yet meet customer needs the company needs to remain integrated - that is it needs to do everything itself as off the shelf parts are not good enough. As the frontier moves so must the product/service, so the company needs to keep everything in house. The company needs to manage the whole value chain to keep pushing towards meeting the customers needs.

Once a product/service outstrips the needs of mainstream consumers owning the whole value chain no longer makes sense, specialists that provide pieces to the puzzle win by using standards to make their product/service interoperable and can provide just what the mainstream users need at either low cost or with niche/differentiated features. In this scenario customers turn away from functionality as a key need.

Further, this article argues that money flows to areas that are not yet good enough, where products need to be integrated to meet the demands. As soon as the good enough barrier is crossed, those components become dis-integrated and can be provided by others - losing any initial functionality competitive advantage. Profit searches for things that are not good enough, places where non-standard, complex integrations are needed and where it is easier to differentiate.