Instead of waiting for an external threat, dating-app giant Match Group is funding a potential competitor launched by the original founder of Hinge, an app it now owns. This is a sophisticated strategy to incubate and control the next wave of innovation within its own market, effectively hedging against disruption.
Related Insights
OpenAI embraces the 'platform paradox' by selling API access to startups that compete directly with its own apps like ChatGPT. The strategy is to foster a broad ecosystem, believing that enabling competitors is necessary to avoid losing the platform race entirely.
To overcome the cold start problem in a network effects business, especially in a conservative industry like finance, a powerful strategy is to create a coalition or consortium model. By giving early adopters ownership and governance rights, you align incentives, build trust, and transform would-be competitors into enthusiastic evangelists for the new network.
A company with modest growth experimented with niche content for a small user segment, revealing a massive, underserved market. This led to a second, separate app that quickly surpassed the original product's revenue and drove hyper-growth, challenging the "focus on one thing" dogma.
Intense competition forces companies to innovate their products and marketing more aggressively. This rivalry validates the market's potential, accelerates its growth, and ultimately benefits the entire ecosystem and its customers, rather than being a purely zero-sum game.
To stay relevant, tech platform companies must obsessively follow developers and startups. They are the primary source of insight into emerging workloads and platform requirements. This isn't just for partnerships, but for fundamental product strategy and learning.
