Are you a market maker or a share taker?  I find that most of the world is made up of share takers.  Share takers focus on getting a bigger slice of an existing pie.   It is understandable.  It is easier to find a market that is already defined with the competitive rules of the road clearly marked and competitors easily identified.  It is far more difficult to create a new pie.  New markets without established competitive rules and competitors are uncharted territory.  There are far fewer market makers.  Yet making new markets is more exciting than working hard to get and keep a share point in a market defined by others.  The biggest value creating opportunities belong to the market makers.   We learn more from market makers and they tend to be passionate people and companies we want to be connected to.  Wanted: market makers.   

The problem with being a share taker is that someone else has defined the market and all you can do is compete for a part of it.  If you open a local shoe store you will compete with other shoe stores in your area.  Your inventory of shoes will look similar and you will probably compete on friendly service and a convenient location.  If the shoe store down the road has a sale you will probably have a sale too to stay competitive.   You will live the life of a share taker pedaling your bicycle very hard to maintain business and to grow by enticing customers from the shoe store down the street.   Meet Tony Hsieh the CEO of Zappos.   If you ask Tony he will tell you that they are not in the shoe business although that is what Zappos is most known for today.  Tony says that Zappos is in the on-line customer service business and while shoes are the biggest part of their business today they may not be in the future.  Zappos is a market maker.  They are defining the standard of customer service for on-line sales.  Zappos does not see the local shoe store as the competition and I bet that the local shoe store would say that they are not competing with Zappos.

2008 was the ten-year anniversary of the MP3 player.  Over 70 digital music players have been introduced over the ten-year history of the market.  All of the share takers trying to capture share in a market defined as MP3 players are either gone or pale in comparison to the market for digital music that Apple has created and leads with the iPod.   It is a classic market maker story.  The music player is just an enabler within an ecosystem that allows the consumer to easily carry personal digital music collections with them wherever they go.  Apple created a system around the enabling technology and never defined the market as the MP3 market.  Rather than settling for a share of the existing MP3 market in October of 2001 when the first iPod was introduced Apple set out to create and lead the digital music market.  Once Apple’s iPod, the market maker, took off the share takers were left to respond.  Apple has never looked back and the iPod story is one of the best examples of the difference between market making and share taking.

Market makers define the rules.  They set the pricing in their markets and have more growth potential than share takers.  If you are a market maker you know that you can’t rest on your laurels.  Market making is an ongoing process.  As soon as you establish a new market, share takers immediately come after it.  If you don’t continue to be a market maker you will find that you can quickly start to behave like a share taker in protecting the market you originally created.  Don’t let it happen.  Continue to look for ways to be a market maker.  Market makers create more value and have more fun in the process.  Wanted: market makers.