YouTube is an example of a product that competitors find very difficult to replicate. Metaverse (Facebook), despite its massive reach, tried to build its version, but the application could not catch the imagination of customers. Instagram, though, has succeeded in its reel functionality. It is another example of building an artifact and business that competitors find difficult to replicate.
Why did these innovations succeed? They succeeded because the value chain and the activities are so complex that the interrelationships between one activity and the other are such that competitors cannot replicate the model. You will find similar examples in all sectors. From the business strategy standpoint, these companies have built applications that give them a sustained competitive advantage over others.
The above description may appear to those not well versed in complex business strategy and difficult to comprehend. You have to look around, and you will find that all successful businesses have this feature of non-replicability. Customers are attracted to these products and willingly come back again and again.
YouTube is leveraging this uniqueness and competitive advantage to generate revenues for itself. These revenues are from advertisements, paid channels, and publishing platforms. These are lessons for innovators, business strategists, and startups. The platform has been able to secure this competitive advantage by building certain unique features like the following:
- User-generated content: YouTube has become a platform for user-generated content, which has created a vast and diverse library of videos that cater to different interests and tastes.
- Accessibility: YouTube is free and accessible to anyone with an internet connection, making it available to people worldwide.
- Searchability: YouTube’s search engine makes it easy for users to find the content they’re looking for, which is important when dealing with such vast content.
- Engagement: YouTube encourages user engagement through features like comments, likes, shares, and subscriptions, which allows creators to build a community around their content.
- Monetization: YouTube offers monetization options for creators, which has led to the rise of professional content creators, and has also attracted companies and advertisers to the platform.
- Mobile-first: YouTube has embraced the mobile-first approach, optimizing its platform for mobile devices, which has made it accessible and convenient for users on the go.
- Integration: YouTube has integrated with other platforms like Google and social media, making sharing and embedding videos easy across multiple platforms.
These factors, along with other features like live streaming, analytics, and audience insights, have contributed to the extraordinary success of YouTube as a video-sharing platform.