Winning makes things easier

When you are winning, you don't need to fight with anyone. You are at the top and there is little to no competition over there. Just look at Google. They have no competition whatsoever. The closest competitor is Bing and it sucks. I would not use it. Maybe DuckDuckGo has a shot but it doesn't have other services like online document editors and an email service. Google is a winner and they are having a blast, they can't fall unless they really work hard to fuck it up.

Building a business like this is gold and everyone wants such a business. Examples of others are:

  1. Microsoft
  2. Apple
  3. Safaricom

When building such a business, you need to be reliable and offer a service that no one else can offer and at a great quality. If you skimp on quality, people may leave. That's why brands fall like Nakumatt, IBM and so on.

There is something that tech companies have that makes them winner-takes-all. It is the network effect and lock-in of its users through centralised data storage and additional services that make the product more valuable as you use it. The more you use Google services, the more dependent you are on them. Even if another service comes along, they can't compete because the switching costs are too high. When the switching costs are low, the product becomes undifferentiated and can easily be switched for something else. That's what plagues supermarkets such as Uchumi, Nakumatt and Tuskys. When these businesses mess up, the market can always go to another brand like Carrefour, Naivas and Quickmart.

However, a company like Safaricom is hard to replicate. Firstly, their services are reliable. They can be better but they work. Mpesa is fast and rarely goes down. People always know that Mpesa will work. They also have a huge market of sim card holders, in fact they have most, maybe 80%. They already have the higher ground. They can lose it by doing a bad job but they have done a good job so far. That's why we haven't gone for services like Telkom or Airtel with the same services. We trust them to continue to do so.

That could be the secret sauce. Build trust with your customers and they will continue to buy your product. Make few mistakes, and even if you do, make sure they are small and no one notices.