In The Art of War, Sun Tzu wrote that “It’s more important to outthink your enemy than outfight him.” Even after 2,500 years, this maxim is still so universal and relevant.
Sun Tzu warns against waging war without a strategy or understanding what your ultimate goal is. Tactics are not strategy. In the business world it’s common for people to confuse the two, because engaging in tactics makes it appear as if you have strategy, even when you don’t. The best leaders must first understand what their goal is and then work to develop unique tactics that will help you achieve that goal. But they must also be prepared to change that goal, then employ new tactics to achieve it.
Here are some strategies to employ to outthink your competitors:
Search for unique marketing arbitrage opportunities: In the early days, Google search ads were very cheap and drove high-quality traffic to ecommerce sites effectively. Today mobile advertising is still relatively cheap and can be used in a similar fashion, but it’s getting more expensive. Street teams and guerrilla marketing have proven cost effective for many new soft drink brands such as Red Bull. Lots of companies employ technology evangelists, whose job is to attend hackathons and meetups to promote tools to programmers.
Find lower-cost suppliers: This is what drove most manufacturing out of the U.S. to far flung regions of the world. It also drove technology companies to outsource engineering resources to Asia or Eastern Europe. Ikea actually pioneered this approach by moving manufacturing from Sweden to Poland, which was at the time a communist country and difficult for westerners to operate in. There are still opportunities to be had by finding low-cost suppliers, if you’re willing to put in the time, effort and energy to find them.
Take risks with your brand: Use spokespeople or content that other more conservative brands won’t use. Fiat has done this successfully by using Charlie Sheen, who was fired from his own show for unprofessional behavior, as a spokesperson. Virgin brands are well known for using unique, creative and outrageous marketing techniques. Its chairman, Richard Branson, once tried to circumnavigate the world in a hot air balloon. He was unsuccessful at the journey, but extremely successful at generating PR for his company.
Seek out and solve big challenges: Look explicitly for hard problems or difficult-to-employ strategies that others are avoiding and master them. Before Apple, everyone in the industry believed that a touchscreen only device was impossible to make. When the iPhone came out, it was revolutionary. A blog where one posts only 140 characters at a time sounds like a ridiculous idea, but that’s exactly what Twitter is. In many organizations there are systems, departments, technology or partners that people avoid because it’s viewed as difficult. Take on these challenges, master them and you will become an invaluable and unduplicated resources.
Study your competition, carefully evaluate yourself and be honest. It’s only through truth and self awareness, combined with a careful analysis of the situation, that you will find your path to success.
Shout out and hugs to Gregory Kennedy for well
I PREFER TO SAVE TIME, MONEY AND HEARTACHE LEARNING FROM OTHER’S MISTAKES, DON’T YOU?
Gary Swart shares some of his essential truths in the article below that should be applied in all businesses, not just startups.
My former company, Intellibank, was sort of like Dropbox done wrong. You’ve probably never heard of Intellibank, because it came and went like so many startups do, but it was a promising company with smart people. We raised money and could have been the next big thing, but it never happened. Why?
Though Intellibank was not successful, I don’t view my time there as wasted. From the mistakes we made, I learned what not to do — and from there, I’ve arrived at some essential truths that can lead to startup success.
1. It’s all about the market
Even the best team with the best product will fail if its market does not exist. Venture capitalist Marc Andreessen says that product-market fit (a term he is said to have coined) is one of the most important factors he considers when evaluating startups.
At Intellibank, we did not achieve product-market fit. Every customer was asking for something different and we gave it to them. We had six markets with 40 different types of customers, and in hindsight, we should have developed just one product. We couldn’t be all things to all people — and by failing to declare our major, we created a world of chaos for our sales, product and marketing teams.
Even if you do have product-market fit, you will not get very far if the market is not big enough. To determine whether you fall into that category, ask yourself if the market you’re targeting is big enough to allow for pervasive adoption of your product and exponential growth.
2. Validate with your customers, not your investors
A common mistake among entrepreneurs is seeking validation of their ideas and decisions from investors. The most important people any company should seek validation from are their customers. That’s right, your customers matter more than your investors — and any good investor would agree.
Do not ignore yellow lights coming from your early adopters, because their activity indicates a momentum shift. Spend time understanding all aspects of the customer value proposition. I once heard Guy Kawasaki talk about his 10X rule — in order for people to switch and buy your new thing, your product doesn’t need to be perfect, it just needs to be 10X better than the alternative.
Think about the 10X rule and ask yourself: why should your customer buy your product? How does your product fit into the rest of his world? What influences their opinion of the product’s value? What is your product displacing — all products displace something — and why should your customer risk making that switch? You need to be as knowledgeable about your customer and their needs as you are conversant with your own product.
3. Focus, focus, focus
Focus and simplicity are often more difficult to achieve than building features on top of features on top of features. As a result, too many startups are unfocused. The time required to trim back an idea is not insignificant — said best by Mark Twain: “If I had more time, I would have written a shorter letter.”
In order to succeed, a startup needs to do one or two things exceptionally well; some of the greatest products today don’t have a million bells and whistles, but they solve one concrete problem brilliantly. I’m thinking of companies like Salesforce.com in the early days. They entered the market with good products, and over time they iterated, grew and added features — but not before they owned essentially the entire market.
By keeping it simple, measurable and achievable you’ll be well on your way. Everyone at your company should be able to articulate the goal of your business, enabling a dogged, unyielding focus on that goal throughout the organization.
4. Aim to exceed expectations
Your goal should not be meeting your customers’ expectations; it should be exceeding them. Truly great and memorable products surprise and delight their customers, so don’t be afraid to spend the time and money to build an exceptional product. But don’t let this pursuit inflate your product’s ego, if you will — making promises you cannot keep will leave you surrounded by disappointed customers, investors and employees.
I cannot emphasize how important it is in the long run to over-deliver to your customers. For example, Fab does not have to give every customer a $5 gift card with every order, but doing so wins them a lot of brand loyalty and even word-of-mouth marketing.
5. Figure out streamlined metrics to measure your progress
I once had a board member tell me that we were over-measured and under-prioritized. It stung. A lot. But it also made quite an impression. As a business leader you need to figure out the metric that matters most for your company and understand that the more you measure, the less prioritized you’ll be. Don’t fall into the trap of trying to measure everything. What I’ve learned is that in the early days, what matters most is having customers who love and use your product. Figure out the one or two best measures to determine this.
6. Pivoting is okay… but it is not a business strategy
I learned this one the hard way. At Intellibank, we would change our pitch deck based on what we thought would get us traction with investors. In one particular meeting, I was in the middle of explaining our revenue model, when a potential investor interrupted me and asked, “Can you tell me what your product actually does?” We were pivoting so often for different types of customers that we completely lost the big picture. You must be agile, but not to the point of an identity crisis; you have to look beyond your four walls and convey the big picture.
7. Ultimately, deliver a great experience. It’s what keeps people coming back
Customers come to restaurants for a great overall dining experience, but the food is the baseline. They come back if the service and experience exceed their expectations. It’s the same with any business—the product is table stakes and it’s the experience that brings people back.
Take a look at Hotel Tonight. It’s only accessible from a mobile phone and while there have been several times mid-flight when I’ve wanted to use the app to book my hotel in my destination city, I can’t and so I wait until landing. Using their service on my laptop would be nice, but the experience is so elegant and over-delivers every time, so I prefer to book my hotels there.
With all of these learnings in mind, think about the product you’re selling and think about where you see it going. Now take a step back and ask yourself the most important question of all—when your customers are using the product how do they feel, and will that feeling keep them coming back?
Shout out to Gary Swart is the CEO of oDesk, the world’s largest online workplace.