The Art of Swimming in a Blue Ocean | How to Use the Blue Ocean Strategy to Start a Business Venture


From Steve Jobs to Elon Musk, it has been proved time and time again that aesthetic is as important as the innovative aspects of the product that you are trying to launch. It is true that Apple makes among the most innovative portable devices out there, but it is undeniable that what gives Apple an edge over its competitors is the beauty of its products and the pride of being part of the “Apple’s tribe.”

Also, it is true that Tesla makes among the fastest and most efficient electric cars in the world, but what makes a Tesla car special is the beauty and simplicity of its design, which makes its buyers proud to be part of the “Tesla’s tribe.”

Yet if innovation and its esthetic side, elegance, had proved time and time again the success of a product, and the whole company that carried it; could this disruptive formula work for other business ventures?

The objective of this article is to give you a refreshing overview on two main topics:

  • Why new/disruptive technologies often lose in the long-run.
  • How to use part of the Blue Ocean Strategy to start a new business venture.

Why Old Is Better Than New in the Tech World

You wear your shoes every day. Although among the oldest invention, shoes will be with us for millennia to come. How do we know? As Nicholas Nassim Taleb points out in his book, Antifragile, the longer a technology has been around, the longer its “life expectancy” will be. In short, Taleb stated on Wired Magazine:

Technologies, ideas, and theories – anything informational or cultural, as opposed to physical –age in reverse.

 In fact, Taleb asserts that due to the so-called Lindy-Effect, a non-perishable thing, such as technology, will increase in life expectancy with the passing of time. Therefore, an old technology, like shoes, can be expected to live way longer than a more recent invention, like the Internet!

This point challenges the most common of the assumptions, that new is always better and it is usually destined to kick out old stuff. Yet from the mathematical standpoint this assumption doesn’t hold to be true.

Therefore our argument is that new, disruptive technologies are too costly and risky.

Yet if old stuff is destined to be with us for a longer time, how can we innovate without breaking through?

Swimming in a Blue Ocean Is Safer

If anyone would ask you to swim in a pool plenty of sharks, would you do that? I guess you would not. Yet, when it comes to the business world, crowded places seem to be the rule. You see streets, where restaurants, shops, and stores compete against each other, for a meager increased revenues, which often does not turn into a profit. The consequence is that, what seems a short-term relief, eventually becomes a sure long-term failure. How to avoid that?

The best way is to swim in blue, safer water. The Blue Ocean strategy is now very popular in the business world. On the other hand, this is often misunderstood. In fact, the blue ocean strategy simply states that “it is better to swim in a blue ocean, where competition is almost absent, rather than in a red ocean, where great numbers of sharks compete against each other for the smallest piece of meat.” This all makes sense, but how to do that?

  • One way is to create new industries. For instance, when Apple Inc. came out with the I-pad this created the “Tablet Market” that did not exist before. Even though many companies dream of this scenario, this is too risky and costly. There is a second hypothesis.        `
  • Another alternative is “to expand the boundaries of pre-existing red ocean markets, therefore find a “piece of an ocean” where competition is still absent. What does this mean practically?

Build on Preexisting Technologies

As Chan Kim, author of the Blue Ocean Strategy, pointed out in an interview for Forbes,

Our study shows that blue ocean strategy is particularly needed when supply exceeds demand in a market. This situation is applying to more and more industries today and will be even more prevalent in the future.

In other words, this is the only guiding principle of the Blue Ocean Strategy. Therefore, markets that are usually seen as unattractive are potentially profitable, according to this strategy. In fact, Chan Kim goes on and states:

By looking at the attributes of markets, one assumes that there are attractive and unattractive industries. While competitive strategy would advise companies to enter attractive industries and avoid unattractive ones, blue oceans can be created in any industries, be they attractive or unattractive, stagnant or fast growing, high tech or low tech.

He goes on by pointing out how an Australian winemaker [yellow tail] entered a super-crowded market, which existed since thousands of years, by creating a product that reshaped the boundaries of that existing red ocean, by creating a new blue ocean market. In other words, when thinking in terms of strategic framework, the entrepreneur or manager could expand the reaching power of the company with a simple but effective tweak of the product.

Let’s see few practical cases that The Four-Week MBA team has found to show how some young entrepreneurs are trying to redefine the boundaries of red ocean markets:

  • The Italian shoe market, Rodolfo Shoes is trying to reshape the boundaries of the extremely crowded and what seems at first sight unattractive market of shoes, by adding a small magnet device that allows the tongue of the shoes to be changed time and time again. This opens up endless possibilities.
  • The pillow-maker FaceCradle Travel Pillow came up with a new pillow to make the traveling experience more pleasurable. By doing so it is redefining the boundaries of the “travel and sleep industry.” this particular case shows how innovation is possible anywhere.
  • The cooking device maker, Sansaire Delta, is reshaping the boundaries of the mass-cooking industry. By bringing smart devices into the kitchen of everyday chefs, this company is reshaping the way we think about the amateurish kitchen.

The above-mentioned are only some of the examples out there. New companies, built on the premise of the Blue Ocean Strategy have endless opportunities compared to huge, heavy companies that compete in the red ocean.

Learn how to get out from the crowded red ocean, and join the crew of the blue ocean entrepreneurs!

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Gennaro Cuofano

Creator of | Head of Business Development at | International MBA

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