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How To Define and Lead Your Own Market
This is a Chapter from my book, from Mindshare to Marketshare.
Market leadership starts with mindshare.
First you win mindshare, then you win market share.
Winning the mindshare battle requires intense clarity about your message. If you can distill your message into a single word or phrase that defines your market, you have a big competitive advantage.
A business can do well by selling products and services into an existing market. To build a multi-billion $ business, you need to invent and then define and then lead your own market.
You invent the market that you want to lead.
That is what Marc Benioff did with Salesforce.com. He invented the Cloud and then went on to lead it. Marc Benioff is a salesman. He is also a technologist, thinker, marketer and strategist, but at heart he is a thought-leadership salesman.
Of course it is not easy to create a new market category. Thousands of marketing professionals get paid millions of dollars to come up with cringe-inducing phrases and tag lines that last as long as snowballs in hell. Messaging clarity is so hard to get right because it has to be based on a very deep understanding of:
- Customer pain point. This includes “where their puck is headed”, the trends in their market, competitive pressures and emerging growth markets that they want to get into.
- Your Unfair Advantage. This includes competitive differentiation and your secret sauce as defined in the last chapter.
If your message does not seem real, it does not stand a chance.
Your message has to seem so real and obvious that, when people hear it, they assume that they have heard it before.
You need to sum up all that complexity, all the dynamics of customer pain-points and technology innovation into a single word or phrase. “Cloud” now means something in the technology business. It did not mean anything until Marc Benioff defined it.
First Benioff won mindshare, then he won market share.
When you have mindshare, your competitors struggle to respond. I learnt this the hard way in the early days of the market for real-time application integration middleware, when technology such as Publish & Subscribe, real time messaging bus and Enterprise Application Integration was being adopted on a large scale in the first vertical niche market – financial trading rooms on Wall Street.
My company was the technical pioneer, with some great reference sites; in our view, we had invented the market. However when customers started to ask us whether we had an “Information Bus”, a term invented by a rival company, things started to go wrong.
Neither of our possible responses was very effective:
- “No, that is not what we call our technology, let me explain”. This did not work. Customers saw the Information Bus concept and automatically “got it”. They did not want to waste time understanding some new concept. Coming up with an alternative message is doomed unless you catch things very early and you are very, very good at coming up with an alternative. Many companies, proudly sticking to the fact that they were the technical pioneers, refuse to acknowledge that a new market is emerging; this can lead to becoming totally irrelevant and fading away. Of course, most attempts at creating a new market category fail and should be ignored; deciding which ones are real takes judgment.
- “Yes, we have an Information Bus and ours is better for the following reasons.” This will get you sales, but will automatically relegate you to the position of being a follower. You can build a good business as the number two or three vendor in the market and, if you time it right, you can sell out at the right time for a reasonable valuation. That is what happened to my company. However that is a far cry from being the market leader in a large market that you define, which was what happened to Teknekron, which was later renamed TIBCO (as in the The Information Bus Company). TIBCO became the leader in a large market that they defined and created $ billions in value.
Example # 1. The Information Bus
The Information Bus was so powerful as a message because it was:
- Simple. This does not mean “dumbing down”. TIBCO was selling to a technically sophisticated audience.
- Based on a genuine “aha moment”. As related by Vivek Ranadive, TIBCO’s founder, the moment came when he asked a software expert to describe why so many software projects failed. As a hardware engineer, Vivek could not understand why well-tested components could not simply plug into the system Bus. Why not do the same with software?
- Visual. TIBCO created a clear and simple diagram of the Information Bus that anybody could draw on a napkin and understand in a heartbeat.
- Executed consistently. Everybody stayed on message. Execution consistency is critical to messaging success. This did not mean salesmen had to become robotic parrots. TIBCO was good at thought-leadership selling. The concept was simply the start of a conversation that went into increasing levels of details as the company engaged in the sales process. Yet at every level they could come back to the simple Information Bus concept and diagram.
Think SAVE – Simple, Aha, Visual, Execution.
Marc Benioff did the same thing when he invented the Cloud.
Example # 2: From A Company You Have Not Heard Of
When you see the end result from a great company like TIBCO or Salesforce, it is like hearing about Isaac Newton discovering gravity after an apple lands on his head. Afterwards it is just no, duh, blindingly obvious.
It is clearly not that easy without the benefit of hindsight.
So to make it more real, here is another example from a company that you have never heard of (mostly because it was acquired early and its product was absorbed by the acquirer). The company was called Information Laboratory and they had invented a product that could take in lots of data points and create a network graph so that you could spot patterns. Projected use cases included finding why electricity grids crash, mapping how human cells form into networks for biotech research, discovering key links in terrorist networks and finding monetizable patterns in social networks. Once you see that “everything is a network”, the number of use cases multiply easily.
The product was brilliant and ahead of its time, but this was the “technology nuclear winter” in the aftermath of the Dot Com bubble bursting, so venture funding was out of the question. So we had to quickly hone in on one use case where we could get revenue. So we chose large-scale software systems, the old legacy systems with thousands of components. We could quickly discover the bad patterns in these “giant hairballs”. Our pitch was simply, “the quickest route to diagnosing your big old software”. This worked and we exited successfully via a trade sale to IBM. In a more healthy economy we would have stayed independent and eventually moved from this entry market (software) to other markets.
This is how Information Laboratory used SAVE:
- Simple. We fix old software quickly.
- Aha. The insight that “everything is a network” is banal today, but was less so in 2002.
- Visual. Our “knock your socks off” demo was when we imported some customer data and showed them precisely where their problem was, by showing them a visualization of their software as a network of components.
- Execution. We approached people with big legacy software and proved that our approach was quicker and cheaper than alternatives.
Thought-leadership sales guys must be involved with Messaging Creation.
The best messages come from a synthesis of what you are hearing from the customers and an understanding of your unfair advantage. You cannot rush that process. If you force it and hire a lot of standard sales guys to deliver the message, it is unlikely to resonate in the market; then you will just blow a lot of capital on sales and marketing. Hiring external consultants to create your messaging is usually a mistake. At best, external consultants can act as facilitators, drawing out what is already known but hidden. Great messages cannot be forced out; they have to emerge from the market reality.
This is where thought-leadership sales guys help to create the message. Think of what Marc Benioff did. He was a sales guy who was always hearing from customers that they did not want to be bothered with implementing software on their hardware and that they wanted to pay on a per user per month basis. Thousands of sales people heard the same message. They took that message back to their managers who told them:
“Don’t be ridiculous. That would put all the risk on us. Also you have a big nut to crack this quarter, how on earth do you think you would crack that if we offered pay as you go licensing?”
Marc Benioff changed the industry because he decided to do something quite unusual – figure out how to give customers what they wanted. It is a fundamental mind-shift to treat your sales people as market sensors, the listening devices in your market. The industrial era sales model treats sales people as pitching machines, all mouth and no ears. In the digital era we have to get that balance right – we have two ears and one mouth. This is even more critical during times of great change, when you need an early warning system to tell you about the disruptive tsunami so that you can take action.
Thought-leadership sales guys are critical to Messaging Execution
The E in SAVE is Execution. Everybody has to stay on message. As Sales guys are the ones in the market talking to customers and partners, Sales guys are critical to executing on the messaging.
If the message does not resonate in the market (because it does not address a real need with a unique solution), the top performing sales guys will not stay on message. The A Team sales guys will ignore messaging that does not work and will talk about whatever resonates – and they will close the sale. Then they will leave your company and close sales for your competitor who has messaging that resonates. The C Team sales guys will parrot the message that does not resonate – and they won’t close the sale. That is why it is better to have no message than a bad message.
Once the market confirms that the message resonates, you need to scale the execution, which means creating “talking points” that carry the message in different ways to different groups. For example, you might talk about it differently to the CFO, CMO, CIO and CEO and you might talk about it differently within different market segments (e.g. you use different talking points with Banks than with Consumer Goods companies).
Only a few firms can define, create and lead their own category/space. Many other firms can be niche players within that category/space. It is easier to be a follower than a leader, but this also requires disciplined messaging creation and execution.
