You Can’t Win Competitive Advantage, You Have to Maintain It

Spritely was awarded Best Digital Innovation at the 2020 Broadband Compare Awards.
23 October 2020

Spritely was recently named winner of the Best Digital Innovation category at the NZ Broadband awards. This is great recognition for the team as well as our partners and customers that consistently rate Spritely as an essential part of their daily lives.

Following the announcement on Friday night, founder and CEO Christopher Dawson was asked by Direct Capital to share some thoughts on digital innovation in the aged care sector.

Direct Capital are one of New Zealand’s foremost private equity companies and investors in private business. They were previously a cornerstone investor in Ryman Healthcare and are now a cornerstone investor in Qestral Corporation. Spritely is proud to count Direct Capital among its supporters and advisors.

A version of this article first appeared in Direct Capital’s online newsletter.

You Can’t Win Competitive Advantage, You Have to Maintain It

Competitive advantage requires speed. That’s what makes it competitive. In the age of COVID-19, technology innovation for seniors has rapidly gained traction among retirement village operators.

In the past, innovation focused on nurses in the care centre. That left retirement village staff to manage growing communities of independent seniors without much digital innovation on offer. That’s changing now.

Actually, it’s always changing – competitive advantage is a moving target. In order to exist it needs to stay out ahead of competitors. Speed of travel is what preserves it.

Industry leaders quickly adopt new innovations to address gaps in their organisation. This is what keeps them moving faster than the herd.

Herd Behaviour

Wildebeest migrating the Serengeti Plains is often the first image we think of when we hear the term “herd behaviour”. In every industry, as in nature, there is an instinctive tendency to follow the leaders, to not be left behind.

Closely following industry leaders, the thinking goes, will limit their opportunity to establish competitive advantage. If a new innovation is successful, the race is on to quickly adopt it so leaders don’t get too far ahead.

Once an innovation becomes widely available that particular advantage is lost. By then, however, early adopters are usually further ahead with new innovations, often propelled by their previous innovation which positioned them well to accelerate.

Lead the Way

Companies that make no attempt to keep up usually suffer the most. The fact that every single company from the 1987 top 30 index in New Zealand is now gone, seems to support this. Many of them failed to innovate. “Minding the shop” isn’t enough, companies must look ahead and see where industries are going.

A revelation from the current pandemic is that innovating companies – such as Amazon and Tesla, have accelerated technological change and profited by a huge surge in their share prices. Elon Musk once said “If your only defence against invading armies is a moat, you will not last long. What matters is the pace of innovation — that is the fundamental determinant of competitiveness.”

Early Adoption

Consider in-flight entertainment systems on planes. When they were first introduced in 1988 passenger feedback was overwhelmingly positive. This raised customer expectations and created a new competitive advantage, which forced the herd to keep up. As more airlines added screens to every seat the competitive advantage was eventually eroded. But early adopters enjoyed that advantage for longer than anyone else.
What about online supermarket shopping. Here in New Zealand Countdown were pioneers of doing this at scale. So when customer preferences shifted to online delivery they were best placed to take advantage of it. In the short term there is a cost to this.

Developing new systems and putting the infrastructure in place to support new technology and processes can reduce margins. I’m sure it cost airlines a considerable amount to add screens to every seat but that doesn’t deter early adopters in a competitive industry. They look ahead to where they need to be and invest in getting there as quickly as they can.

Leaders know that positioning themselves for the future, by moving early, will improve acquisition and retention by more than enough to offset the cost of innovation. Furthermore, margins will improve as new technologies and processes mature. Remember, when Netflix started streaming films, streaming was a tiny percentage of their DVD rental business.

Customers First

The first airlines to provide inflight entertainment, the first supermarkets to offer online delivery, the first hotels to offer free WiFi, the first retirement villages to offer free remote medical monitoring all have one thing in common.

They are all examples of innovators that put customer experience and long term customer growth ahead of short term margins.

Starting Slow

During 20 years between 1990 and 2010, more and more things gradually became standard in New Zealand retirement villages. The old resthome expanded to include a subdivision of tightly packed single level housing built around a community centre. Then community centres grew to include a bar and restaurant.

Basic activities were planned and a real sense of community evolved. People moving into these ‘new’ retirement villages grew to expect a vibrant, social community. Then basic activities expanded to include a whole range of health and wellness programs.

One of the villages added a bowling green and the herd followed, then a swimming pool was added and the herd followed, then a billiard table, then a library….you get the idea.

Stepping Up

Recently a new generation of retirement village has emerged. Alpine View and Burlington (operated by Qestral Corporation) have been raising expectations even further.

Their villages cater for a new generation of retirees. Retirees that expect large land parcels, modern urban planning, architecturally designed houses, a central lodge, lakes, art works, adventure tours, cinemas, cafes and coffee carts.

Telehealth and Remote Medical Monitoring

Now, in the age of COVID-19 Qestral Corporation are raising expectations again, this time by developing telehealth technology conjunction with Spritely. When you have a diminishing period of time remaining in this world, nothing is more important to an older person than preserving their health.

By equipping every house with Spritely’s age-friendly technology, Qestral are the first retirement village operator in New Zealand to make touchscreen medical monitoring standard in every single house and apartment. Resident feedback has been overwhelmingly positive, putting competitive pressure on other retirement villages to do the same.

Like the early adopters of in-flight entertainment, Qestral will eventually see this advantage eroded by the herd. But that won’t stop them and a few early adopters innovating at speed, in order to maintain a competitive advantage over the rest of the industry.

A New Industry Standard

Today you don’t see many widebody aircraft without in-flight entertainment systems, you don’t see many hotels without free WiFi and you don’t see many retirement villages that don’t have a swimming pool.

In future it will be hard to find a village that doesn’t give everyone age-friendly technology to support their health and independence. A bit like swimming pools, age-friendly technology will become an industry standard.

The only question is, which villages will be early adopters?


Spritely keeps seniors connected with frequent village updates and regular village activities that are easy for residents to book and manage themselves. Participation in activities increases face to face interaction and even when residents are at home we keep them in face-to-face contact with free 1-tap video calling. Spritely users report feeling less lonely with Spritely at their fingertips.