Friday, June 6, 2008

Everyone's Aware That There is a Business Geek Running This Show Right?

Straight from the Harvard Business Online, is an article about asymetrical competition. I know, really, I can hear you through the internet's wires and across the 802.11g airwaves: "Dude. I didn't subscribe to your blog for this crap. Tell me about the Edel Pils."

Well. You'll just have to get your Edel Pils review from the Isthmus this week, folks. I'll ruin the surprise and tell you that Robin gives it 3 Bottle Openers (out of 4).

In the meantime, Umair Haque has some really interesting things to say about asymetrical competition. So, come along for the ride. Trust me, your consolation prize is that we won't be posting on Monday because the MBR staff is going out of town.

So, what is aymetrical competition? Well, think about it like this: Coca Cola used to be the number one brand in the US, it's now Google; Barrack Obama beat Hillary Clinton. "Pint-sized revolutionaries are able to pop seemingly out of nowhere and topple yesterday’s giants – fast."

I think you see the parallels. Or, if you don't like clicking on links: craft beer is the pint-sized revolutionary and Miller/A-B are yesterday's giants.

So, how does this happen? Well, "in asymmetrical contests, yesterday’s sources of advantage become today’s sources of disadvantage." What does that mean? Well, what are the advantages of big beer? National penetration. Large, efficient breweries. Scores of attorneys and money just waiting to crush or buyout the competition.

So, how are these a disadvantage? No localization of product. Highly polluting industry. Bad press. Just to name a few.

So, what's one way to start turning over the goliath? Well, Mr. Haque looked at how the Obama campaign worked and instead of ferreting away resources and hiding critical information from subordinates, the campaign freely shared information with everyone in the orgaization in order to better leverage their skills with that information. Not only does this require and build trust in the organization (the street workers are being trusted to have the voter and donation lists!?), but instead of giving the lists over to the competition, the volunteers "used their own laptops and the unlimited night and weekend minutes of their cell-phone plans to contact every name and populate a political organization from the ground up."

What does this mean to the brewing community? Well, maybe instead of hoarding secrets, it would be more beneficial to share information that is traditionally considered "trade secret." Like what? Well, like using the principles of open-sourcing to leverage public knowledge and fanaticism to create a fantastic dopplebock recipe like Flying Dog did. To create joint-collaborations like Avery and Russian River's "Collaboration Not Litigation" instead of wasting precious resources by suing each other over calling your beer "Salvation." Maybe by sharing your hops and grain sourcing with others, like Sam Adams, instead of hoarding it to their detriment.

I think it's important to recognize that craft breweries are not, really, in competition with each other. Not yet, anyway. To the extent that Furthermore can lend a hand to Rush River or BluCreek, and vice versa, it helps the whole craft beer industry. Sure, maybe they forego short-term profits, or even sacrifice a trademark, but the goodwill generated from the publicity brings more drinkers to craft beer.

The second important point that Mr. Haque makes is that these differences, between the small revolutionary and the big industry, are fundamental and inherent to the organization - they are not just strategies for overturning competition, it is how these companies, and campaigns, do business. "The difference is in the DNA. ... It’s new DNA that drives asymmetrical competition – when we organize and manage in new ways, we are able to tap new sources of advantage."

As if to emphasize the point, Mike Masnik over at TechDirt points out that ideas are easy, execution is difficult. There is more to be gained in execution by talking openly with outsiders than by secreting your information behind locked safes. But, more importantly, Mr. Masnik points to a blog post by a venture capitalist named Brad Burnham who notes that the most successful companies that he's backed were the ones who had a culture of openness - the ones more interested in getting it right than impeding competition by withholding information. The one's whose very DNA was based on trust and learning and building a culture of loyalty.

For example, a brewpub that puts its entire business plan online. Doing so not only generates comments and input from those who may be able to help, but it makes the next brewpub startup infinitely easier. And, while one could argue that perhaps the Brewers Guild should be able to provide some of the guidance that RePublic is looking for and documenting, the role of the guild in these matters is perhaps another post for another day.

Miller creating an open-source beer is a publicity stunt - Miller is not interested in sharing its recipes, or learning anything, or engaging anyone, it is interested in selling more beer and it's good advertising. Flying Dog brewing an open-source beer is a true grassroots effort to engage the knowledge, creativity, and enthusiasm of its beer-drinking public. Not only does the result create a fantastic, complex beer as good as anything made by "secret ingredients" by the InBev monstronsity, but it shows a respect for the drinkers and homebrewers who not only participated in its creation, but who drink and appreciate it. Building a community that not only appreciates your product but appreciates the way you go about creating that product, that shows that mutual respect, not only sells beer, but creates loyalty - an asset far more valuable than a six-pack.

And we, the public, know the difference between publicity stunt and genuine-ness; we can spot the fake from a mile away.

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