Generalist vs Specialist Strategies

Surviving and thriving

Invention is an area where this model fits well. If the invention is useful for everyone, like the light bulb or telephone, it’s essentially a generalist forging into new territory. Specialists from the previous environment may struggle to follow if their capabilities do not transfer. But once that new environment is open for competition, the other generalists will be right on your heels. You need to lock down as large a territory as you can defend before the other generalists arrive. This territory must have everything you need to reproduce and survive. If it does, it becomes your base, the place from which you can continue to grow and take on the other generalists.

Specialized invention, in contrast, focuses on catering to a smaller niche. A product that serves a niche well can be hard to dislodge, especially when the market is too small to reward many competitors. Its growth may be limited, but a stable need and established expertise can help it endure. Zildjian cymbals illustrate a long-lived specialization: the company’s history dates to 1623. A reputation and accumulated craft can create an advantage within a narrow market, even when competitors remain.

A generalist faces more competition every day. Surviving and reproducing are a constant struggle. So, for them it would seem that stress is part of existence. To be means to compete—for territory, for food, for a mate. This is reflected in how we talk about the large, generalist companies: the constant fight for market share to stay ahead of the changing market conditions by offering new and better products and merging with or taking over other companies to grow even bigger.

Specialists can exploit resources or habitats that many competitors cannot use, such as fishless breeding ponds for tiger salamanders or the panda’s low-energy bamboo diet. This narrow fit creates vulnerability when the environment changes. A species may struggle to find a substitute habitat or food source; a business may struggle when demand for its specialized product disappears.

Most people don’t realize that the fax machine, something that sends images over wires, was invented in the 1840s. We tend to think of it as this failed technology that started with a short-lived boom in the early 1980s. But no, as soon as we could send information over wires, we experimented to discover what the full scope of that information could be. Images were an early example of what could be sent. The fax survived for over 150 years in part because it lurched from niche to niche, staking out the few small but often powerful areas where the ability to transmit images was game changing. How did it do this?

To start, fax users didn’t exist. If you never had the ability to send images, if you didn’t even know it was possible, then it isn’t something you were likely pining away for. Therefore, developers of fax technology identified and sought out small groups of potential users to create a market. Appealing to small, unrelated groups was one of the main challenges for the technology for almost a hundred years. It was never very obvious who the technology would be extremely useful for. As Jonathan Coopersmith explains in Faxed, “Despite numerous efforts by inventors and some state support, pushes to develop facsimile technology never created corresponding significant pulls by market demand.”4

In addition, the fax niche was a protected environment. “For facsimile, that protected niche was both institutional and technological.… These protected environments allowed a fragile and expensive technology to survive.” Fax developers deliberately sought out markets with less competition “where faxing received greater resources (including users willing to pay the high costs) and support, giving it an opportunity to mature and develop.” 5

Faxing needed a specialist niche because it couldn’t compete with the early generalist of the telegraph. The telegraph “had enormous advantages of easier use, much lower cost, less interference in transmission, and an already-developed infrastructure as well as users who had [by now] incorporated the standard telegram into their business routines.”6

Fax’s first niche was with the newspapers—a niche that it helped solidify by creating an expectation that only faxed photographs could fill. “Judged strictly by numbers, facsimile was a minor technology. Less than a thousand transmitters and receivers existed in 1940. Their impact was greatly out of proportion to their numbers, however, because they enabled newspapers to print the latest photographs with the latest stories, visually transforming the news and strengthening the role of photographs in newspapers.”7 Once the public had photographs with their news, there was no going back. It might have been a small niche, but it was one that, at the time, only faxing could fill.

Faxes stayed around and progressed because there were some niches that they fit perfectly. The military was another early consumer, and its requirements were filtered back into the development of the technology. Anyone who needed images was interested in fax, as well as anyone who needed messages with as little room for error as possible. Both of these were requirements for the military. From weather diagrams to direct orders, copying the image reduced the need to translate its contents into another form, although successful communication still depended on legibility and reliable equipment.

There was a downside to focusing on niche markets. It allowed the technology to develop with complete incompatibility across the different manufacturers as they competed for the same small pool of clients. “In reality, deliberate incompatibility fragmented the market and scared away potential users fearful of choosing the wrong system.”8 In the world of business, fax was initially used as an internal company tool, reducing the immediate need for compatibility with machines in other organizations. This lack of compatibility and standards had to be addressed before fax could become the generalist of the 1980s and '90s. “Starting in the early 1980s, the combination of increasing deregulation, true compatibility, quickly dropping costs, and rapid technological change created a blossoming of new machines, applications, and services.”9 Fax was finally able to survive out of the niche.

In terms of information over wires, telegraphy, then telephony, became the generalists in the environment. Faxing could not compete with their lower cost and ease of use. It was through identifying and marketing to niches that fax managed to survive until the conditions changed, and the technological advancement and social interest allowed it to flourish as a generalist for a time.

« Natural selection has a limited repertoire of potential forms from which to choose, and convergent evolution is the result. » George R. McGhee10