We've previously introduced the idea of the competitive life cycle. Let's take a deeper dive into how the competitive life cycle often unfolds. Early on in the competitive life cycle, we have what we might even refer to as the error of Fermat. This is the idea that early on, things are largely exploratory. Innovation focuses on different product features and different underlying technology that might eventually become the dominant form within the industry. At this period, we often see small entrepreneurial firms entering the industry, in many cases pioneering the industry. To the extent that profits are made, they're often made more through differentiation and niche placement than they are through, for example, a low-cost structure within the industry. Let's refer to the automobile, and in particular the automobile industry 100 years ago when it first emerged from the remnants of the carriage industry. When the automobile industry first appeared, we had lots of different competitors, hundreds of different competitors in fact. We saw incumbents moving into the industry. Studebaker brothers were the largest most successful makers of horse-drawn carriages in the United States, having upwards of 60 percent market share in the United States. They saw this transformation occurring and they made investments to make this transition into the automobile industry. We saw others come from examples like the bicycle industry. Many other are just entrepreneurs who were interested and got into the industry. What was fascinating about the early phases of the automobile industry, there were lots of different drive trains within the industry. We had the Stanley Steemer using steam power. There were actually numerous electric vehicles early on in the automobiles history. There were kerosene-powered engines, and of course there was the gasoline internal combustion engine, all competing to be the dominant technology within the industry. Now, over time what we typically see is a dominant design start to emerge. We see not necessarily one technology, but in many cases, a limited number of technologies emerge that become the dominant form factor we see within the industry. Now as we see this occur, innovation begins to shift from innovation and experimentation around different form factors to things like manufacturing, processing, delivery, service, and this is where a shakeout typically occurs, where we might be left with just a few large efficient firms. Interestingly enough, many of the pioneering firms might actually wither away. It's not guaranteed that being the first mover, the first entrant into this new technology or new industry, is going to guarantee long-term success. Eventually, as we all know, the gasoline internal combustion engine becomes the dominant technology. It's interesting to note this might take a long time. In fact, even as late as the 1930s, 1940s, there were electric vehicles throughout different cities throughout the world. In New York City, they actually had a fairly significant market share for delivery vehicles. But over time, we eventually settled into the internal combustion engine being the dominant technology. It's interesting to note that it's not necessarily that the best technology wins. In fact, there's lots of factors that might drive why one technology dominates over another. In the case of the automobile industry in the United States, eventually companies like Ford would enter in and compete more on efficiency of production, for example, through the assembly line process than it was necessarily through the innovations of the technology of the automobile itself. Eventually, we were left in the US once again with the big three of General Motors, Ford, and Chrysler. General Motors in particular was interesting, is that they in essence rolled up the industry through acquisitions. They bought up a lot of different players to create the General Motors company. All the while, other companies were going out of business. Studebaker brothers made a good go for it for a couple of decades, but they eventually are now footnote in history and have gone away. When we think about this process, we eventually want to think about the renewal of this process to a new disruption. Once we reach that dominant design and the market matures, this actually creates the seeds for future disruption to occur. That disruption might be exogenous, might be driven by technology change, what we sometimes referred to as technology push. It could also be driven by the market itself as consumer preferences shift, what we often call demand pool. The same S curve that we talked about in terms of cumulative revenue, we can also think about in terms of technology performance. It's often the case that there are some potential, even physical limit, to how well the technology can improve. Let's turn our attention now again to the automobile example. We're in the midst of another disruption in the industry driven by electric vehicles and autonomous vehicles, this after nearly 100 years of stability within the industry. Why is this occurring now? Well, we can speculate. One is underlying advances in the technology, the technology push concept here. Some of it driven by digital transformation itself, making these technologies more viable. Some of it also is being driven by consumer demand. For example, consumers demanding low emissions vehicles leading to the prevalence of electric vehicles in the market. We see obviously a lot of incumbent firms competing and offering vehicles along these lines, but we also see new entrants like Tesla making significant inroads. In fact, by 2017, Tesla actually had a higher market capitalization than General Motors, meaning basically that the market thinks that Tesla will be a larger more significant player in the future. We see companies like Volvo, an established player in the market, pledging to go all electric by 2020. Once again, we don't know how this will exactly play off, but we have a pretty good idea. We'll probably see entry into the industry, we'll probably see competing designs here in terms of what the dominant design technology might look like, and we'll probably eventually see a shakeout and a coalescing around a common form factor for the industry in the somewhat near future. Again, diving into the details of the competitive life cycle gives us a greater understanding of how competition unfolds when we have these disruptions taking place.