"Find a sector that values your input but still leaves you with enough resources to accomplish other, perhaps more ambitious strategic objectives."

"If you’re not mainstream you simply won’t sell to customers who would otherwise happily use your product if it had mainstream status"

"A business that can ride out the storm, while competitor after competitor goes under, can survive and even thrive"

Product evolution

Many industries have been made increasingly irrelevant by new or improved technology. For instance today, sales of typewriters aren’t what they used to be. Other times, there’s a shift in focus; we are less likely to cross the Atlantic by passenger ship to get to a meeting in New York, but plenty of us climb aboard a giant liner for a cruise holiday. A similar shift happened for financial journalists.

Until the internet changed the business of recruitment, people looked in newspapers and magazines for jobs. Since a plain job sheet would be boring, content (news, features, interviews, opinion etc.) was wrapped around the job ads. The advertising space paid for production and the editorial content was a free gift to entertain potential recruits. When the recruitment ads disappeared so mostly did the paper publications. But the desire for what the publications provided – interesting, relevant, informed, audience specific content – did not.

The shift here is subtle. Where businesses used to buy media space to place a direct sales message alongside interesting editorial, some businesses now put energy into creating content (don’t just think words but podcasts and videos) that engages a particular audience. This isn’t advertorial, where a story is simply a thinly veiled sales pitch. This is genuinely useful content that legitimately builds an audience that not only consumes your content but contributes to it, comments on it, shares it and even criticises it. This is audience engagement. This is Content Marketing.

Some may see the provision of such content as a loss leader but others (rightly) see it as a necessary and legitimate expenditure, updated and reinvented for today. Your audience is more likely to include you in their world when you engage them in yours, or theirs. The question is really not whether to do it but how to do it well. Today, many financial journalists do as much writing for companies to use in their own communication channels or to post on social media, as they do for dedicated media platforms.


Last man standing

A close cousin of product evolution is the strategy of Last Man Standing. Much focus is on new ideas and technologies that disrupt and lead to the decline of old industries. Common sense dictates that businesses who are slow to see the writing on the wall – that their entire sector is doomed – don’t have long to live. But a business that can ride out the storm, while competitor after competitor goes under, can survive and even thrive. Saddle and saddle bag makers, Gucci and Lanvin, may not have responded immediately to the existential threat to horse transport posed by the proliferation of automobiles, but their tenacity paid off more than handsomely.

Few will clamour to enter a dying sector because so many have clamoured to leave and by staying while competitors leave, there’ll be, by definition, less competition. Staying put may not seem like a very innovative or long-term strategic plan, but at worse it should produce cash and it also buys time which can be used to invest in a powerful Last Man Standing strategy. Harrods and Macy’s outlive the great department store era and Mont Blanc fountain pens have won a place in a world where almost every type of written communication is written (we rarely even sign cheques any more) in digital ink.

There’s a Last Man Standing everywhere you look and it’s clear that some of the great print publishing houses that dominated the 20th Century (I needn’t name them) are casting around, not for an exit strategy, but for a triumphant, not-going-anywhere strategy. I’ve worked with a couple of them myself. That’s how I know.


Finding the dentist market

Wherever businesses are in the life-cycle, strategy creation is not a linear process. I recently came across an interesting interior designer’s strategy. Presumably, the dream job for an interior designer is fitting out landmark or boutique hotels or designing the interiors of national art galleries in global capitals. This particular interior designer was hired to refurbish a dentist’s practice. Understandably, the interior designer wasn’t overexcited. But after she had completed the work, the dentist enjoyed an increase in business and higher fees.

Quickly, she became the go-to interior designer for dentists. The work wasn’t over-demanding or complicated or even wildly lucrative but as a steady business, it created the breathing space to enable her company to go after and win more challenging and rewarding projects. She had stumbled on a powerful interior designer business strategy. And it was great news for dentists; each new dentist reported that after their makeover, business improved.

There are similar examples which we see every day. Back in the eighties, Sainsbury’s began putting petrol stations on their car parks and selling petrol at cost. The filling station companies scratched their heads for a while before putting full supermarkets on their forecourts. This led to a good number of developing countries having Shell or Mobil as their largest supermarket chains.

Every business should have a dentist strategy – intentionally. Find a sector that values your input but still leaves you with enough resources to accomplish other, perhaps more ambitious strategic objectives.


Crossing the chasm to play with the big boys

Finally, while stumbling upon lucrative markets is good news, expanding a toe-hold in others can be tricky. Here’s the rub. Initially, early adopters and enthusiasts are your foundation. They ‘get’ your product and enjoy its unique features. Life starts by being feature-led. From there, a small pool of interested customers ask for stuff to be added. This leads to a feature-rich product that’s ever more focused on a small and specific group of aficionados but less attractive to everyone else, the early mainstream and the late mainstream markets.

These complexities have been described in the book, Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers, by Geoffrey Moore (1991) and his subsequent books Into the Tornado (1995) and The Gorilla Game (1999), which are now seen as a trio of marketing classics.

The crucial idea of the chasm is that mainstream customers only buy from mainstream suppliers. There can be nothing wrong with your product strategy, your business, or your people, but if you’re not mainstream you simply won’t sell to customers who would otherwise happily use your product if it had mainstream status. I recently came across a company that had seen its product tested and admired, but the commercial decision was that the company was too small and too risky to be considered as a supplier.

Overcoming that issue requires a break: finding an early mainstream customer which has a problem which could be solved by your product. It has to be a serious enough problem so that the company has to, or is prepared to, buy outside the mainstream. Once early mainstream has purchased, then those mainstream credentials are yours and the whole of the mainstream is ready to buy. At that point, you are (in Moore’s words) into The Tornado because you suddenly need infrastructures and systems – such as help desk support and enormous delivery schedules – to cope with demand.

Elon Musk’s Tesla is making a similar journey. Enthusiasts bought his cars no matter what they cost. Mainstream consumers now have a good idea of the amazing spec but to deliver a mass market Tesla car is proving tough. As well as the problem of rivalling the auto-industry’s century-old infrastructure for sourcing materials, manufacturing, marketing, distributing and selling, he’s expected and keen to maintain Tesla standards of technology.

Moore proposes that the best route across the chasm is through B2B (Business to Business) not B2C (Business to Consumer). In a blog, (http://tinyurl.com/z3fgzhc) he cited the Cloud as having had to cross the chasm. And he is associated with an email marketing company Infusionsoft which has successfully made that journey.

Once the chasm’s been crossed, the late mainstream market opens up. This, he calls a Gorilla. It’s a company that introduces a new idea and finally comes to dominate, like Amazon or Google. Crossing the chasm applies to every market, not just technology. Moore’s ideas around the early adopter, early mainstream and late mainstream points to an interesting thought. For every early adopter, there must also be a late adopter. That could easily be a serendipitous clue to success for a Last Man Standing strategy.

Peter Williams