Use The Environment To Blind Your Adversary – The Amazon Kindle Has A Competitive Advantage

This week the new Amazon Kindle (Amazon’s digital book reader) has dominated tech device media coverage. While I am eager to get my hands on one after Amazon sold out of the first version during the holidays, what intrigues me most about this device is how clearly it illustrates an important part of technology innovation: that the product itself plays but a small role in its own success.

To see this, imagine the sudden dread that came over the young Samurai who challenged an older, weaker, but more experienced Samurai to a duel. The older Samurai accepted under the condition that he could pick the time and place of the showdown. As the young Samurai approached the chosen hilltop at the precise morning hour, he was blinded by the sun rising behind his adversary.

He could not see his opponent. Even though he was faster and stronger, he still lost the battle.

The lesson is this: the environment matters as much as the object, and great innovators know how to craft their environments to win.

Now the Kindle is, by all of the reviews I’ve read, an amazing device. It uses an E-Ink® electronic paper display, which requires no backlight and therefore almost no power. Its display is made up of ink particles that shift into the position of text and image and that look much like ink on paper. To read at night you need a nightlight … and therefore less battery power. The Kindle can also store an entire library of 1,500 titles on its drive.

But what gives the Kindle the potential to do what no other digital book has done before? That has less to do with the actual technology, and much more to do with the “context” or environment Amazon has created.

For example, you can download a book in seconds from anywhere because Amazon signed a deal with Sprint Nextel to use Sprint’s 3G network. This allows users to directly download titles to their Kindles from the internet while watching TV or standing in line at the grocery store.

Unlike Sony’s reader or the Apple iPod, the Kindle’s content doesn’t need to be first downloaded to a computer and then transferred to the device. The user doesn’t have to deal with connecting the reader to the computer, and this makes the Kindle remarkably efficient, easy and fast.

This strategy is familiar to me, and it is pattern #30: choose the unorthodox path.

Amazon offers 240,000 books in digital form and is rushing to expand its catalog. It has signed deals with numerous periodicals including the New York Times that enables it to give users access to a whole collection of subscriptions.

This is not unlike Apple’s early strategy of signing deals with major record labels for the iPod, effectively locking up the supply of music. If Amazon can position itself as the preferred platform for at least some time it can create a similar advantage.

This is another strategy that I’ve written about before, and this is pattern #10: lock up resources.

Those are just two of the many support innovations that Amazon is employing in the digital reader arena. Other technologies have used the same patterns, and these strategies continue to be successful. I’m not saying that Amazon is guaranteed to win this battle of the readers, but I wanted to point out that Amazon seems to be opening with a strong set of winning plays that offer the Kindle a competitive advantage.

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