Hey everyone,
Most businesses, yours included, likely have something that gives them an edge.
Could be a key relationship, a proprietary process, deep expertise in one area. Maybe it’s a tollbooth somewhere.
That thing is a moat against your competition.
But moats can become traps.
Let’s look at how, via BlackBerry’s disastrous decline from 50% market share to basically zero.
First, a quick update on a business I’m incubating:
Update on the AI Project
A few months back, I wrote about our early hypotheses on AI in small business.
Since then, my associate Manuel and I have been navigating the idea maze that comes with starting any new business.
First, Manuel explored voice AI and AI agents. The tools weren't ready. He pivoted to AI strategy audits (helping companies figure out their roadmap). That landed him three paying clients.
But here's what's interesting. As he talked to all these companies, a pattern emerged. The best use case for AI right now isn't the flashy stuff.
It's what I call the Modern Fax Machine problem: businesses drowning in document ingestion and production. Construction bids, insurance paperwork, compliance docs. Stuff that requires humans to read 500 pages and enter data manually.
Because AI actually does this well right now. Reading and producing documents. We've got that nailed.
So, Manuel is now exploring something completely different than where he started. It’s all part of the process.
If you've got a document problem you want to automate, or you want an AI audit, reply and I'll connect you.
Manuel is also doing a few free AI diagnostics in February if you want to know what's actually possible for your business right now.
In the meantime, I’ll keep you posted on this business in future newsletters!
Overusing your leverage creates resentment
If you have power over a key relationship, someone is keeping score.
BlackBerry's genius was routing every message through their own servers. This made carriers dependent on BlackBerry's infrastructure — and carriers hated it.
In 2006, BlackBerry's co-CEO was asked about carrier concerns. His response: we don't care what they think. They need us more than we need them.
He was right. Until the iPhone showed up, and Steve Jobs landed an exclusive deal with AT&T.
Suddenly, every other carrier was scrambling for a competitor.
They looked at Blackberry, the company that had been dismissing them for years. They looked at Android: an open system they could actually control.
They chose Android. And they didn't just passively support it. Their salespeople actively pushed customers away from BlackBerry devices.
The infrastructure that made BlackBerry dominant made them a target. So when an alternative appeared, the carriers had years of resentment to act on.
Back to you.
If you've built something that gives you control over a key relationship, ask yourself: who resents this arrangement? What would they do if something better showed up?
The uncomfortable truth is that leverage without goodwill is just a countdown timer. Pressure is building.
Because “you’re stuck with us” is not a long term solution.
TOGETHER WITH HIGHLEVEL
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Think of it as the Swiss army knife for small businesses.
Right now, my readers can get an extended free trial for 30 days by signing up at gohighlevel.com/michaelgirdley.
Already a user? Try out our Unlimited or SaaS PRO tiers.
Your best customers can blind you
Here's the scarier one.
BlackBerry's best customers were IT departments at Fortune 500 companies. These customers wanted security, enterprise integration, physical keyboards. So that's what BlackBerry kept building.
But your best customers are usually people who already fit your model.
They're not going to tell you about the adjacent market you're missing. They're not going to warn you that a cheaper, simpler competitor is stealing the customers you never had.
(The iPhone was built for consumers. Touchscreens and apps were about fun, not business.)
This is the innovator's dilemma.
Your best customers tell you what they want. You build it. They're happy. Revenue grows. Everything feels right.
The question isn't "are my customers happy?" It's "who's not my customer, and why?"
Sometimes the disruption comes from below — someone serving a market you dismissed as too small or too cheap. By the time those customers matter, the competitor has a head start you can't close.
So: where's your leverage? Who resents it? And who's not buying from you that maybe should be?
That's my take, anyway.
3 things from this week
Appetizer: Next on the hit list: the Rise and Fall of Starbucks.
Main: This “We Buy Gold” business was really interesting - but definitely not something within my appetite for risk.
Dessert: Is this you? (Last chance for HoldCo Conference, by the way - we start on Monday!)
Thanks for reading!
Michael
P.S. The full BlackBerry story is on YouTube if you want the details. Watch it here.
Problem-solve with me.
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