How to build competitive advantage in the age of the social product

By Stellan Björnesjö

How to build competitive advantage in the age of the social product

A couple of years ago there was an article published in Harvard Business Review named The Age of Social Products. It might sound very futuristic, but in fact, already at that time the age of social products was already here. So what is it and how is it transforming the basis of what competitive advantage is?

First of all, in order to understand social products we first have to know the foundation for their existence; what the Internet of Things (IoT) is and why it’s important. If you don’t already know, I suggest you read the short and excellent article before you continue. Why? As Ingrid puts it in her article:

’Almost regardless of industry, IoT is predicted to be the single most important factor impacting fundamental business logic in the coming decades.’

The reason why IoT is so powerful is that we’re now fast-moving from communication only between people or between people and things, to communication between things and things, also known as ‘machine to machine’ (M2M) communication.

But if the history of the Internet is anything to go by, this will only be the starting point of the next big shift. Or as it’s outlined in the above-mentioned Harvard Business Review article; ‘We are moving from a world in which physical products are separate to one in which they are connected. [Yet] The real change will happen when products aren’t just connected, but social.’

‘Instead of the Internet of Things, we should be thinking about the Social Network of Things.’


If you’re one of the 43% of companies that are using or plan to implement an IoT application in 2016 that is really great but to really take advantage of the coming shift it’s also necessary to start thinking about ‘the social life’ of your products.

What does that mean? Connected devices will not only connect but also leverage the collective intelligence of their community of connected devices. Think about Tesla’s self-driving Autopilot feature, for example. Autopilot gets better and better as real-time data from cars on the road gets fed back to the cloud and processed by machine learning algorithms. Collectively, all owners help improve the experience for current and future owners without further input than driving the car.

This leveraging of the collective intelligence of products signals a shift in what leads to competitive advantage. In the Harvard Business review, it was summarised like this:

‘In an age of social products, competitive advantage comes not from product features but from network effects.’

Instead of focusing solely on product supremacy, and beating competitors with better features and attributes, companies of the future will thus succeed by having products that better leverage the collective intelligence of the network of other connected products. This is much easier said than done, but what changes will you make to take advantage of this opportunity to shake up your industry? 

I want to talk to an expert! 

Stellan Björnesjö
Online Strategist at Zooma since 2012. 15+ years of experience as a manager, business developer and specialist within online and e-commerce.
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