The End of Competitive Advantage: Why You Must Keep Running

Survival Strategies Learned from the Ghost of Blockbuster and the Red Queen’s Race

• Understand the meaning of the ‘Red Queen Effect,’ which requires constant running.
• Analyze and compare the reasons for the failure of giants who rested on their success and the strategies of companies that succeeded through self-innovation.
• Learn concrete ways to overcome the fear of failure (perfectionism), start small, and keep moving forward.

The Red Queen Effect: Standing Still Means Falling Behind

The relentless effort to maintain competitive advantage. In 2000, Blockbuster, the undisputed leader in the video rental market, laughed off a $50 million acquisition offer from Netflix. Ten years later, Blockbuster went bankrupt while Netflix grew into a giant. This story remains a symbol of companies that rested on their laurels and poses a question: why did once-powerful companies collapse so suddenly?

The answer lies in Lewis Carroll’s novel Through the Looking-Glass. The Red Queen tells Alice, “Here, you have to run as fast as you can just to stay in place. If you want to get somewhere else, you must run at least twice as fast as that!”

This is the ‘Red Queen Effect’. In business and life, maintaining the status quo means falling behind. Because the environment and competitors are constantly moving forward, standing still or running at the same pace is not enough to survive. The comfort of having reached the finish line is the most dangerous illusion. There is no finish line. The race itself, requiring constant running, has become the new reality.

The End of Competitive Advantage: The Tragedy of Complacency

In the past, creating a ‘sustainable competitive advantage’ was the goal of companies. But Rita McGrath, professor at Columbia Business School, asserts in her book The End of Competitive Advantage that this era is over. In today’s volatile world, you must constantly ride the wave of ’temporary competitive advantages’. You need to quickly seize and exploit opportunities and move on to the next before the current advantage disappears.

The Giants’ Graveyard: Tripped Up by Internal Enemies

What happened to the giants who ignored this truth? They were not defeated by external competitors but by the inertia of their own success—the internal enemy.

• Kodak: Invented the first digital camera but shelved its own innovation to protect its highly profitable film business. Eventually, it was swept away by the digital revolution it helped create.
• Nokia: Was aware of smartphones but focused only on better hardware, failing to shift to the new battleground of software and ecosystems.
• Sears: The 124-year-old retail giant failed to adapt to the e-commerce era led by Amazon. Trapped in bureaucratic inertia, it sensed change but responded with ineffective measures.

The Runners: Masters of Self-Destruction

On the other hand, companies that constantly reinvent themselves and jump into new races survive and dominate the market. They prove that the real threat is not external but the internal inertia of resting on past success.

• Netflix: After toppling Blockbuster with its DVD-by-mail service, it didn’t rest on its laurels. It disrupted its own core business to transition to streaming and later became a content empire by producing original shows.
• Amazon: Transformed its internal infrastructure technology (AWS) into a service for external companies, reshaping the tech landscape and creating a new massive revenue stream.
• Microsoft: Under CEO Satya Nadella, tore down the old ‘Windows empire.’ Abandoning a closed Windows-centric strategy, it embraced a ‘cloud-first, mobile-first’ approach and built an open ecosystem, achieving a great transformation.

Comparison: The Difference Between Stopping and Running

The line between success and failure ultimately depended on whether companies had the courage to destroy their past success models.

The Biggest Obstacle to Running: Perfectionism

The stories of companies apply equally to individuals. Even knowing we must keep running, why do we keep stopping? The biggest reason is the fear of failure, i.e., perfectionism. Fear of failing prevents us from starting or burns us out with unrealistic standards.

The Beauty of Wounds: Kintsugi (Golden Joinery)

In Japan, there is a beautiful traditional craft called ‘Kintsugi,’ which repairs broken pottery by filling cracks with gold powder. The philosophy of Kintsugi is not to hide flaws but to highlight them with gold, turning scars into part of history and a new beauty. Marks of failure and wounds are not shameful but unique patterns that make us deeper and more special.

The Magic of Mistakes: Serendipity

Post-it notes were born from a ‘failed’ strong adhesive, and penicillin from a ‘mistake’ of leaving a bacterial culture plate unattended. Such ‘serendipity’ shows that what we call ‘failure’ can often be a door to new opportunities. The key is having a prepared mind to recognize that door.

Just Get to the Starting Line: Start Small

If you have the attitude to not fear failure, now you need to ‘stand at the starting line.’ Social psychologist Brené Brown says that vulnerability is the essence of courage. The courage to face uncertainty is the true fuel for running.

The Most Practical Tool for Starting: MVP

The startup concept of a Minimum Viable Product (MVP) is a strategy to include only core features instead of a perfect product, learning and improving through market feedback. It’s a business version of courageously showing vulnerability instead of perfectionism.

• Dropbox: Proved explosive market demand with a 3-minute explainer video instead of a finished product.
• Airbnb: Validated the core hypothesis “Would people pay to stay in a stranger’s home?” with a crude website renting out air mattresses in the founders’ own living room.

The MVP philosophy is to start small, learn, adjust, and try again. If you want to be a writer, your MVP is posting a blog article instead of writing a perfect novel. I myself wouldn’t have started this article if I aimed for perfection from the start. I developed my thoughts by drafting and revising repeatedly.

Conclusion: What Is Your Next Step?

There is no finish line in the Red Queen’s race. Success is not a destination but something discovered in the process of running itself.

• Key Points:

  1. Competitive advantage is temporary: The world constantly changes like the ‘Red Queen’s race,’ and maintaining the status quo means falling behind.
  2. The biggest enemy is internal: Perfectionism and complacency from past success block innovation.
  3. Start small and keep learning: Have the courage to be vulnerable, take your first step with an MVP, and continuously upskill and reskill to update yourself.

I ask you, the reader: What is your next step?

Don’t wait for a perfect plan. Take your smallest, simplest ‘minimum first step’ right now. Writing a paragraph, signing up for a course, or sending an email is the greatest way to start your race.