I just read an interesting article on Yahoo! about Microsoft's Zune. The article expresses some surprise that Microsoft is continuing to support its MP3 player even though it experienced a 54% drop in sales from the Zune and is cutting its workforce.
It seems logical that Microsoft would cut its support of the Zune. This is what most companies would do.
But if you look at historical precedent – both into Microsoft's history and even far beyond – you will see a proven pattern of competition.
The Chinese have a saying for this pattern: beat the grass to startle the snake. This metaphor advises that one should consider launching a small attack to learn something about the market first. Then use what you’ve learned to respond with a deeper attack. You can repeat this approach by slowly moving into the grass without being bitten by the snake.
Microsoft's entry into new businesses often follows this pattern. The most well known example is its attack on Netscape. Think of the parallels. In Netscape, we had an innovative, dominant, more forward-looking company doing something cool. People cheered it along and discounted Microsoft as having followed too far behind to catch up. Bill Gates’ book "Business @ The Speed of Thought" blatantly ignored the Internet. The game would soon be over, industry experts echoed.
But Microsoft's slow pace proved to be patience rather than mistake. Whether the company knew it or not, it was following a competitive pattern that has led generals and companies to victory for over 5,000 years.
With each mistake, Microsoft learned and adapted. Eventually it overtook Netscape.
Microsoft did the same with servers and, less successfully perhaps, with MSN.
Several thousand years ago, a Chinese general wanted to defeat a rebel who had gained power and overtaken a corner of his Emperor's domain. He could have charged in with full force. But instead he launched a small attack, captured the rebel leader, and then let him go.
The rebel leader continued to hold on to power and refused to surrender. So the general repeated his pattern, attacking and learning how the rebels reacted, and then retreated. Each time he let the rebel leader go.
After repeating this pattern seven times, the rebel leader eventually gave in. He became a loyal governor under the Emperor.
This strategy may not always work, but history tells us that when people count you out but you remain focused and patient, then your path often leads to victory. Learning from small incursions helps you weed through the errors and emerge triumphant.