Far Out Adjacencies

In Competitive Strategy, one of the things Porter looks at is potential competition to your business from companies adjacent to your business.  Adjacencies are getting a whole new meaning in the digital age.  I think that is what makes it tough to do SWOT analysis with absolute certainty.  Sometimes you have to consider something very outlandish like Amazon entering the food distribution space.

Even though companies are worth billions on paper and seem to have a mature business, it doesn’t mean they have it all figured out.  Uber is an example of one of those kinds of companies.  Uber experimented with UberEats for a while. I just saw this article where Uber’s French competitor, Blablacar, is thinking hard about entering the insurance brokerage market.

It makes some sense although like any business it’s all about the execution and economics.  The long-term value of the customer must still be greater than the customer acquisition cost.  In MBA speak that’s LTV>CAC.

They have data from phones and an installed base of users.  The data they have is meaningful to underwriters.  They have a different business model from other competitors in their space so that makes them look at the entire distribution of the business differently.

With a smartphone and big data competition can come from almost anywhere.