VentureBlog comments on a Wall Street Journal article about the human hair market. Yes, really. And it's quite fascinating. It explains how the Chinese are, extraordinarily, even with their low cost manufacturing base, at a disadvantage to the Indians because of the source of free hair at the temple at Tirupati.
As can be seen with numerous consumer electronic devices, networking products, etc., once the technology behind those devices becomes commoditized, Chinese manufacturers are at an incredible advantage given their extremely low cost structure. Not only has the pervasion of Chinese manufacturing lowered the cost of numerous devices and sped the process of component commoditization, it has changed the way in which startups must look at sales and marketing strategy for device enabling technologies. But, hey, at least those startups can take some solace in the fact that China is at a disadvantage when it comes to producing human hair. Who would have guessed?
What I find most interesting is the insight that it can be practically impossible to compete in a commoditized manufacturing environment. That's why I'm focusing my career on building knowledge-based microbusinesses which can't be commoditized or replicated. Let me give you an example of one such venture.
GlobalGreyhounds.com is the largest greyhound racing fansite on the internet. At its heart is a discussion forum. That might lead you might think it could easily be replicated. And even though there are numerous free message board resources on the net we pay hundreds of euro per month to host our forums for a guarantee of quality and accessibility. So surely we're vulnerable to low cost (or no cost) competitors? Why in the blazes would anyone pay to join GlobalGreyhounds when there are free alternatives?
Because of our unique knowledge base of 170,000 messages. Because track owners, greyhound board members, stud masters, punters and aspiring owners all congregate on a forum where a huge amount of effort is given to ensure an enjoyable community experience. Because GlobalGreyhounds.com has become so much more than a website - it's a social gathering place. [Aside: And it must be said that our members make the site what it is more so than we do!]
I hope that doesn't sound like trumpet blowing. I just wanted to highlight the great advantage knowledge-based business has over manufacturing operations and the crucial difference - knowledge cannot be commoditized.
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