COVID-19 affects everyone regardless of age, race, economic status, wealth, social status, or company large and small, therefore I believe that COVID-19 is the Great Equalizer. An equalizer is just a concept unless you seize the opportunity to reinvent your business. Now that stores are closed for five weeks, anxiety high, and I hope you have been thinking about steps on restarting your business.
We need to learn history about how others have coped and reinvented themselves. I have decided that I am going to keep my mind busy to control my anxiety. The model or strategy to survive and thrive in the post-COVID-19 era is leapfrogging.
In the field of industrial organization, the concept of leapfrogging was proposed by Fudenberg, Gilbert, Stiglitz, and Tirole in 1983.[1] In summary, the researchers analyze under which conditions a new entrant can leapfrog an established firm. The hypothesis proposes that companies holding monopolies based on incumbent technologies have less incentive to innovate than potential rivals. Therefore they eventually lose their technological leadership role when new radical technological innovations are adopted by new firms that are ready to take risks.
As a small business, we are more agile, more innovative, more resourceful, and we forced to think outside the box because we have NO choice. These are all ingredients of radical innovations, which will become the new technological paradigm, and the newcomer leapfrogs ahead of the formerly leading firms.
[1] Fudenberg, Drew, Gilbert, Richard J., Stiglitz, Joseph and Tirole, Jean (1983). Preemption, Leapfrogging, and Competition in Patent Races. ” European Economic Review.