Picking through the pieces of dying business models seems like a poor way to avoid "the herd". That's like trying to avoid competing with the lions by hiding out among the sick and wounded antelope. ("Gosh, these antelope don't look very dangerous, with their open wounds and their expressions of terror! I am certainly safe from them!")
If you think you hate being part of a herd, imagine what it feels like to be running away from one.
If you prefer to avoid the well-traveled path, you might prefer to look for a healthy business that has not yet been mortally wounded, and try to compete with that. Remember the words of Eric Sink (http://software.ericsink.com/Choose_Your_Competition.html):
"The big problem with avoiding competition is that you are also avoiding customers. The existence of a competitor indicates the existence of paying customers. If you can't find anyone who is making money with your idea, you really need to wonder if there is any money to be made there at all."
If most people stop using and buying records, that's a "dying business model", right? So riddle me this, Batman: are there people who are going to keep using records? If so, it's certainly not for the ability to hear the music -- that problem has been solved better. Is it a lifestyle choice? Is it because they are anti-technology?
So while one definition of the record business shuts down, is there another definition that will take its place? Hey -- the answer might very well be "no". But if it is yes, it's certainly not the same business model that died. It's a whole new market, with new drivers, new players, and new distribution channels. It's also a market where there is going to be lots of talent lying around that isn't being used any more (like how to design good covers, various custom record production techniques, etc)
Continuing on in my example, if you could find 10 million folks all over the world interested in something to do with records -- custom records, records as bird houses, records as the new frisbees, whatever -- and you can market something to them that they want, that's called a business.
Running away from the competition has nothing to do with it. I'm asking a simple leverage question: given two markets of equal size and a limited budget, do you compete with a hundred other small businesses, some of which with a lot of funding? Or do you compete with 4 or 5 business, all of which are figuring it out just like you are?
I'm not taking a position. In fact, my question was "is there a contrarian play to be made?"
Obviously, you want competitors. But as the article points out, you want to pick them well. My intention was not to suggest to enter markets without competitors. Sorry if if that's what it seemed. In my mind, there's no dumber and bigger competitor than a big industry sitting on top of a "dying business model". That's because as I point out, it's easy for the most profitable business model to change without the industry being able to acknowledge it.
Seems to me that 4 or 5 competitors who are making money in a new field where there is no main player is a good spot to be in. Sometimes differentiation in a large hotly-competitive market is more hype than reality.
If you think you hate being part of a herd, imagine what it feels like to be running away from one.
If you prefer to avoid the well-traveled path, you might prefer to look for a healthy business that has not yet been mortally wounded, and try to compete with that. Remember the words of Eric Sink (http://software.ericsink.com/Choose_Your_Competition.html):
"The big problem with avoiding competition is that you are also avoiding customers. The existence of a competitor indicates the existence of paying customers. If you can't find anyone who is making money with your idea, you really need to wonder if there is any money to be made there at all."