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Shaping Path Dependence For Guaranteed Future Sales

The FT definition


I was reminded of the concept of path dependence from this Tim Harford piece on the development of the Diesel engine. Here’s his key definition;

a self-reinforcing cycle in which existing investments and infrastructure mean we keep doing things in a certain way, even if we’d do them differently if only we could start from scratch

It has two significant ramifications from either entry point for solution sellers.

The phrase often used is lock-in.

How can you embed yourself so entwined with the operating fabric of your client that they’d never think to leave you? Relationships, processes, systems, results?

Then what if you are the ones locked-out?

Your prospect seems stuck on the road they’ve joined. Sunk costs so huge, switching costs daunting and opportunity costs unexamined.

Cite that last line; what if they could ‘start from scratch’?

Perhaps it isn’t the fantasy it may first appear.

Think of all those Big players that miss the boat on the inevitable disrupter. From telegraph-to-phone, web-to-everyone, the qwerty-keyboard example the FT definition above quotes, even today oil drillers that are suffocating renewables. In vain. As I type Dutch trains now run 100% on windpower.

To get the conversation started alone could be enough to sway thoughts your way.

Acknowledgement that path dependency is in play creaking the door ajar, destined to swing wide open.

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Category: quirky

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