Conifer Consulting

Paranoia as a force for good - Rethink Your Competition!

“Only the paranoid survive” is a good mantra to adopt from Andy Grove. When it comes to business Andy says there’s plenty to worry about including competition, “of course, I worry about competitors. I worry about other people figuring out how to do what we do better or cheaper, and displacing us with our customers.”  The key to remember is that: You always have competition. Always.

 Every start-up I talk to claims: “we don't really have a direct competitor because we are so unique, blah de blah!...”  Don't catch yourself saying this.  Wear your customers' hat when you speak about your competition.  I mean that. Truly wear the hat and then write down one single reason why they are better. 

Here’s what I mean. Even the iPad, which I believe is a “magical” product and has created arguably a new category (hard-to-use tablets of yore not withstanding), has competition both from my iPhone and from my laptop. Think about all the occasions and uses that an iPad may be used for. For each of those occasions and uses, I the consumer, may choose from myriad devices and will pick the one, that gives me the best experience depending on factors important for that use e.g., for media consumption, battery life, lightweight nature and “always on” state of the iPad are all godsends. A second example: Quicken has always competed with Excel for very small businesses. A third example: All product upgrades compete with the “do nothing” mind-set when users don’t see enough value in upgrading; this is because in vast majority of cases users don’t utilize 80% of the features/functions and often we cannot visualize what’s better when our basic needs are being met.

 So what should a stellar Product Manager do? Ideally you should take the time to follow a bunch of target users of your product to first hand observe and deeply understand what they do today to meet the needs/wants your offering will fulfill.  Such studies constitute ethnographic market research. But they can be expensive and time consuming.  I understand that.  But there are other effective ways to get the 80 for the 20.  Talk to your target users. Recruit them and call them up or find them among your colleagues, family, friends and people you know through people you know. Put social networking to good use here.  Talk to potential users and ask them to describe a couple of the “use case” scenarios you’re going after or those that your offering will render extinct.  Ask them what they do today, how they do it and why? You can even ask what they’d like to change but beware of ­how you ask, exactly how you phrase it and the “answers” it yields.  As Apple CEO Steve Jobs likes to quote Henry Ford (paraphrase) “If we had asked people what they wanted, they would have said a faster horse…”  This is an important insight but it can cut both ways but that discussion is for another day.

Once you have an understanding of what users do today note what your competition is.  What are all the tools, products, services your potential users are using today and may continue to use when your product comes to market.  Why may they continue to use it? What’s attractive about these substitutions? Why would a user not switch to your offering? Remember inertia is a powerful force in the world.  Go to work on making sure that the benefits you offer are fundamental enough, big enough, and convincing enough to activate the switch.  Test your hypothesis with well-designed market research experiments.  Use the power of social media to enable quicker, smarter answers. Conduct this exercise internally with your team: If you introduced your product (or if your product is already in the market) and 6-12 months later you had the awareness you wanted but not the adoption, what could be the top 5 reasons people had not adopted your offers? Be honest.  Really work on this exercise – in detail.

As you think about what/who your target users may choose over your offering be sure to also consider the broader changes, trends and tech innovations that are coming to impact your industry. Develop frameworks and hypothesis for what impact these changes will have and what else may begin to encroach upon your market space.

More on Successful Positioning

Today we met with one of our clients, a leading software infrastructure player, who we had helped  reposition a key product in 2005. This repositioning was a significant shift because our work recommended moving the focus from a well established albeit entrenched market to a smaller market segment. This strategy would enable them to focus on solving a major customer pain in a clearly superior and differentiated way.