COVID-19 has brought many businesses to their knees. Ambitious growth strategies have been replaced with survival tactics.
Many headlines seem to suggest that these decisions are purely reactive, "defensive" moves, like the shift to WFH (work-from-home).
For example, here's what one retail consultant said: “There’s no other option [besides moving online]... Otherwise, you let someone else have your business. That’s why even Costco ... TJ Maxx ... are going online.”
But one of the most under-appreciated strategies in business is one from the martial arts: the "judo strategy." Or taking your competitor's strength and turning it to your advantage.
Say there's a stodgy incumbent that relies on cultural perks like unlimited snacks to attract top talent. A savvy startup that can quickly reposition itself to have perks for a remote-first world (think: Zoom poker tournaments) can exert a seamless judo move. "Enjoy perks? We have the best digital perks in town." The incumbent's previous strength now shifted to the startup. Coinbase is a great example of this.
We've seen examples of strategic judo across our Flagship portfolio recently.
For example, brick-and-mortar stores historically had a strong advantage: discovery. Browsing in-store had an element of intimate exploration that the internet found tough to match. But Facebook, sensing an opportunity during quarantine, just launched Shops which enables its users to connect their Instagram discovery to purchasing. Judo move.
Many strategies these days are in fact reactive, don't get us wrong. But some go beyond just that - they react by taking their opponents' momentum and siphoning it for themselves.
Judos can be very lucrative investments if identified before the herd catches on.