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Taylor Swift is an outlier. To learn from her, we need to consider which phase of her career she was ... More in. For most companies this is when she first established a niche market in country music.
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One is the biggest pop star on the planet. The other is one of the world’s most valuable companies. But Taylor Swift and Amazon have two things in common. First, they are both are outliers in terms of success. Swift’s Eras tour was the highest-grossing music tour ever, generating more than $2 billion. Amazon has a market cap of more than $2 trillion and is the global leader in several industries. Second, they are both used to explain why particular strategies lead to success. Amazon is cited in no less than 700 Harvard Business Review articles for exactly this purpose.
The problem for strategists is that, as outliers, Swift and Amazon are able to do things others can’t. Drawing strategy lessons requires a chronological approach.
I spoke to Kevin Evers, the author of There’s Nothing Like This. The Strategic Genius Of Taylor Swift and a keen observer of business strategy, to understand which insights from their extraordinary success are transferrable, at which stage of a corporation’s lifecycle.
Phase 1: At the beginning, find a new niche
Entrepreneurs have three options. They can enter an established market doing the same thing that everyone else does, come up with a new twist, or target an entirely new niche market. The last option—often called a Blue Ocean strategy—is hard to pull off. However, it also offers entrepreneurs an opportunity to carve out a dominating position that lasts. That’s what both Swift and Amazon did.
“Swift wanted to write songs for an audience of her peers—teenage girls,” Evers points out. Country music did not see this as a market. Even more unusual, she wanted to write her own songs.
To pull it off, Swift needed a partner that was fully aligned with her vision. Even though she had a development contract with RCA, a big player, she decided to go with Scott Borchetta who was starting his own label. Evers explains what that means: “He didn't have funding. He didn't have headquarters. He didn't have much of anything, really. But it ended up working out because Brochetta had a lot of skin in the game.” He needed this to work as much as Swift.
For new entrepreneurs the takeaway is obvious: developing a new niche market is tough and you need a fully committed partner with complementary skills. For Amazon that partner was Ingram, a wholesaler for books. Amazon’s relationship with Ingram meant it could list over a million titles right from the outset, even though its own warehouse only had a capacity of 2,000. In essence Jeff Bezos’ technology became the web frontend for Ingram.
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