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Market enablement

Market Enablement

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Definition & Summary: Actively encouraging the growth of a competitive market around a component or service you care about . Instead of monopolizing, you enable others (even competitors) to enter, because a bigger market ultimately benefits you in some way.

Detailed Explanation: This strategy might seem counterintuitive -- why encourage competition? Origins: companies realized that a larger pie can yield a larger slice even if share % is smaller. Purpose: increase overall adoption of an activity to create network effects or drive costs down. Key principle is creating an ecosystem or environment where multiple players can thrive, often through open standards, shared platforms, or nurturing user communities. For example, releasing supporting tools, holding conferences, providing funding or data -- anything that lowers the barrier for others to participate . The enabler often has a plan to capture value downstream (e.g., selling infrastructure or being the broker in that enabled market).

Real-World Examples:

  • Historical: IBM in the 2000s invested heavily in promoting Linux (open-source OS) across the industry. This enabled a competitive market for enterprise operating systems (in which IBM was just one player) but it weakened Microsoft's hold on operating systems and boosted IBM's hardware and services sales . IBM calculated that a larger market of Linux users would ultimately buy more IBM servers and consulting, so it was worth enabling that market even though competitors like Red Hat also benefited.

  • Historical: Apple enabling the mobile app market by creating the App Store platform and encouraging third-party developers (even competing apps) to build for iPhone. By lowering barriers (easy SDKs, profit share incentives) they grew a huge app ecosystem. This accelerator play made the iPhone more valuable (lots of apps) and while many developers profit (competition), Apple captures value via the platform fees and increased device sales.

  • Hypothetical: A big electric car manufacturer open-sources its electric vehicle charging connector design and actively lobbies others to adopt it industry-wide (similar to Tesla opening its charging port). This encourages a standard so more charging stations and cars use it. The market for EVs as a whole grows faster (consumers see standardized infrastructure). The company benefits because its own cars can charge everywhere and it might sell the most chargers or services around that standard.

When to Use / When to Avoid:

  • Use when: You stand to gain from the overall expansion of a market more than from hoarding a niche. This is common if you monetize volume or adjacent services. It's ideal if an activity is currently too nascent or niche -- by enabling competitors you validate and grow the space (think of it as "a rising tide lifts all boats," especially if yours is well-placed to capitalize) .

  • Avoid when: Your advantage is narrow and easily copied -- enabling a market could just create strong competitors that erode your business. Also avoid if investors/board aren't comfortable with the optics of helping competitors (needs strategic vision). If you don't have a plan to capture value (like a platform or back-end play), you might just end up commoditizing yourself.

Common Pitfalls:

  • Helping the wrong players: You might inadvertently enable a competitor who then outpaces you. For example, you open a standard but a rival becomes the top service provider in that now-expanded market.

  • Undermining margins: Expanding a market usually involves commoditization -- ensure your business model can handle lower margins at higher volume.

  • Execution risk: Market enablement can involve complex coordination (industry groups, partnerships). It might stall or fragment if not executed well.

Related Strategies: Open Approaches (often the method used to enable a market -- open sourcing or standardizing), Ecosystem Plays like Alliances (forming alliances to grow a market), Harvesting (once the market grows, you can harvest successful pieces).

Further Reading & References:

  • Wardley, S. -- On "Market Enablement" . Explains encouraging the development of competition in a market as a way to accelerate evolution.

  • Example: Tesla's Open Patent Pledge (2014) -- Tesla opened its EV patents to encourage others to build electric cars, aiming to grow the EV market (interpreted as a market enablement move, expecting benefit from broader EV adoption) .