Located in the upper-left corner of a terrain map, exploratory ground is characterized as static and abstract. Exploratory Ground is the home to boutique businesses (static), with differentiated business models and targeted offerings (abstract).
Exploratory Ground is characterized by modest revenue with potentially substantial profit margins. Exploratory Ground is a hothouse for new markets that nurture high expectations. The Internet as an industry would have begun on exploratory ground.
Exploratory Ground represents the “early adopter” stage of new products and business models. If the market aggressively adopts then it may progress into expeditionary ground. If the market turns out to be small but meaningful and profitable, competitors may build sustainable positions in exploratory ground. If not, they could be destined for mercenary ground. Exploratory Ground is also a stopping off point for fast moving businesses entering expeditionary ground.
On exploratory ground it is possible to develop sustainable positions by staying small and off the radar screen. Each move towards Expeditionary Ground increases the vulnerability of attack. Defensive maneuvers such as patents and copyrights are critical, as is the development of solid business models and revenue engines prior to venturing onto expeditionary ground (high growth and profit terrain).
Business models in exploratory ground that are unable to build the momentum necessary to enter expeditionary ground may lose “steam” and fall into mercenary ground. This will happen if revenue growth stalls and profitability degrades. In this sense, exploratory ground is a Darwinian melting pot - a crucible - that separates the winners the losers. The winning business models are able to accelerate performance and enter expeditionary ground, while the losing business models see their performance decelerate and fall into mercenary ground - either to be acquired or go out of business.