Digital Renderings: The Strategic Value of Complements
I’d restate this as “investing in complements is an important exception to ‘focus on the core’”.
This is a killer piece by Nick Carr that leads off with an anecdote of about Michelin road guides:
“Before the Michelin Group could make a go of the car-tire business, more people would have to start buying cars and they’d need to drive their vehicles more frequently. That’s where the Red Guide came in. André and Edouard saw that by giving motorists a practical, problem-solving handbook for traveling by road, they’d encourage the sale and use of automobiles - and in turn pump up their company’s nascent tire business.”
The economics of complements drive many of the best marketing strategies because of the unique characteristics of information, particularly the high “first copy” costs and small/zero marginal reproduction costs.
Businesses that think creatively about these economics are best positioned to scale their marketing. Google did it with Chrome; the Michelin brothers did it with their road guides; Guitar Center did it with TuneCore deal…
Imagine if Kodak or Canon had bought/invested in YouTube (or video sharing generally).
Etc…
