Gun Manufacturers Know What Silicon Valley Doesn’t

By Eric Layer

The postmortems are flying over the departure of Nest CEO Tony Fadell, but the deeper challenges facing the company—and the entire industry of smart-home and internet-of-things products—revolve around the question of how to forge a system of cooperating products out of fiercely competing brands.

Belkin announced recently that their WeMo smart switches will cooperate with Nest hardware, and Google’s “Works with Nest” approach has been attracting some attention. These are steps in the right direction. But full-blown solutions might be found in a surprising industry.

Gun brands have been building integrated systems for decades. Functionality across brands can be a matter of life and death. Amidst this high-stakes vertical, competing manufacturers have organically built a highly complex system that enables their products to work seamlessly together, while preserving brand identity and competition.


Brand Fluidity

First-time gun owners buying ammo might be surprised to learn that it doesn’t have to be made by the same company that made their gun. While the tech industry’s approach has been somewhat siloed—Apple sells iPhones and Samsung sells Galaxies—the gun industry doesn’t shy away from making products for each other’s products. A Springfield .45 pistol will always shoot Remington .45 ammo.

That’s because systems are defined by caliber, not by brand. Caliber is technically just the size of a bullet, but it’s also the structure of the whole industry—the antithesis of tech’s status quo where brand dictates compatibility. In the gun industry, the brand a consumer selects will always depend on their specific needs and never on a prior purchase decision. Once you buy a firearm from one brand you can always switch brands for accessories and ammunition.

Hundreds of manufacturers produce products for a given caliber. And this is intuitively good for business: if you patent a bullet but you’re the only one making the gun that shoots it, you’ll never generate the demand you would if the caliber were ubiquitous. If Nest limits its target audience to exclude Belkin users, they’re rejecting massive potential growth.

Weapons historians can list countless calibers now out of production. These products didn’t fail for poor engineering or even poor advertising. They failed because they didn’t generate enough interest amongst their competitors.

Having a rival’s name on their box might make Nest or Belkin nervous. But what should scare them much more is the outcome when the turf they ferociously stake out becomes irrelevant as a result.


Innovation Within and Without:

Not only do gun brands sell one another’s products, they develop them. Innovation in the firearms industry is overwhelmingly collaborative, such that the brands that put the original caliber in the field—like Remington in the case of the .223—eventually own little of what it becomes.

And this isn’t a bad thing for the original innovator. With ammo makers like Winchester, Hornady, and others all competing to build a better product, Remington’s decades-old innovation has remained relevant in ways that the brand could never have achieved on its own. And Remington itself gets to be reinforced as a legend every time a competitor sells popular new products for a caliber it helped create.

Cooperation between a Belkin switch and a Nest hub is progress. But instead of asking how to build two interlocking systems, Belkin should be asking how to put the next “Nest” hub on the market before Nest does. The internet of things is still in its infancy. The greatest opportunity to grow market share lies in growing the market—something that will never happen if brands are more concerned about their own needs than their consumers’. To help gain trust, to develop markets and products, and to pioneer new opportunities, brands have to give a little.


Differentiation that Helps Consumers

Firearms like the 1911 or the AR-15 are built by dozens of different companies, all accepting exactly the same accessories, tools, and ammunition. So how can they really stand apart from their competition?

Gun brands differentiate, but because of shared technology, they have to differentiate on what they do rather than what they have done.

In tech, where intellectual property is king, the temptation for a brand to rest on its laurels can be intense. If you own Windows and your competition doesn’t, it’s hard to stay hungry. But the Remingtons and Winchesters of the world aren’t safe just because they invented legendary products—they’re legends because everybody else now makes their product. The spread of technology and proprietary designs to competitors is paradoxically what has enabled these brands to thrive, while simultaneously forcing them to actively compete.

As a result, gun brands build intense loyalty by what they give the market rather than what they hold back—whether the lowest price, best accuracy, lightest weight, or other variables. Tech companies have largely operated on the exclusive, exploiting the technology nobody else has. But rifle makers have enjoyed success with the opposite strategy, building a product everybody else makes, compatible with everybody else’s accessories, but carefully tailored to the needs of a niche audience.

And it works. It’s not uncommon for coveted products like a Rock River AR-15 to boast waiting lists of months or years, even if ten other brands are available on the shelf at the local gun shop. With abundant options on the market rather than a few giants, customers can find exactly the brand that fits their needs. That’s real brand identity: consumers who love you because they chose you, not because they’re stuck with you.

Each of these approaches and benefits have their own reasons they have worked in the firearms business, and they won’t transfer seamlessly to computers and smart-home systems. But Silicon Valley shouldn’t assume the challenges it’s trying to tackle today haven’t been tackled already in other fields. To innovate while taking cues from others who have gone before isn’t just smart—it’s the kind of thinking that will create tech’s next Remington.


Eric Layer

Partner and author, Eric specializes in building things faster and better than mere mortals. Call Eric when you have an impossible mountain to climb. He’ll get you to the top.

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