In every single example I gave, entrenched competitors were unable to copy a strategy without eroding their cashflow. For example, United is afraid to fly all their flights out of Long Beach instead of LAX, because they fear that American will have the perceived higher ground and customers will switch over. The other examples should be more obvious.
I understand. My bad. On my original reading I thought he was suggesting the startup should have cannabilistic cash flow. Whereas he is indeed meaning that to competitively respond the incumbent will have to cannabilize his own cash flow.
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In every single example I gave, entrenched competitors were unable to copy a strategy without eroding their cashflow. For example, United is afraid to fly all their flights out of Long Beach instead of LAX, because they fear that American will have the perceived higher ground and customers will switch over. The other examples should be more obvious.
I understand. My bad. On my original reading I thought he was suggesting the startup should have cannabilistic cash flow. Whereas he is indeed meaning that to competitively respond the incumbent will have to cannabilize his own cash flow.