One of the first rules of creating a winning strategy is to see things as they are and not as we believe them to be.

Strategy is not forgiving of misinterpretations about the way things are. For example, if everyone believes that Microsoft is inhibiting innovation in an area when in fact the company is fostering innovation, that misinterpretation will not change the reality.

To illustrate, open source thrives in the presence of Microsoft and would falter in its absence in the same way that reefs thrive in the presence of sharks and reefs go barren when the sharks are fished out. Dominate players, like Microsoft and sharks, tend to shape their

environments. Innovators have to work to conform with or get around the technology environment that Microsoft shaped. That shaping creates a direction for innovation, and a direction is important if you intend to arrive at a new place with any deliberation.

You might not think that a dominant competitor like Microsoft fosters innovation if you paid too much attention to the chatter on the net. No doubt the individual inventor or company among the many may be driven out of business competitively by Microsoft’s hold on or entry into certain markets. Given that individuals and not industries write blog posts, and individuals may lose even while industries on the whole win, we don’t always see the broader positive perspective of the collective of winners…many of whom may view their individual success as arising despite the dominant player instead of as arising to fill a niche a dominant player opened for them.

The positive effects of a dominant player in an industry can multiply. Apple is the Apple of today because Microsoft has been instrumental in “forcing” Apple to dominate creative media computer systems, like film production and music, in order for Apple to stay viable and prosperous.

Apple’s way to survive and thrive in the presence of Microsoft has in turn shaped entertainment industries and fostered innovation mostly for the better. If you want to play in Apple’s space, even if you are Microsoft and have been instrumental in shaping Apple, then you need to innovate to conform with or work around Apple. This affords you with a direction to innovate and compete, or you can take advantage of the markets that Apple has created instead of competing.

If you worked in open source and planned your strategy with the wrong assumption about how your opportunity came to be, then you could begin a journey of a thousand miles in open source with a misstep. If you likewise chose to work against Apple instead of with Apple in the creative arts, it may be you, not Apple, that stifles your opportunity to prosper.

(This is number 41 in our list of IP mistakes and how to fix them.)