The roar continues today from Google's strategic move yesterday: introducing a new category "superphone". (Read more here from Michael Arrington at TechCrunch.)
This shows the power of Flanking into an uncontested territory. Great lesson for startups.
When this classical strategic marketing maneuver is made, media and blogging commentators immediately jump on the new word, hotly debate its meaning and thereby give it both credibility and brand it in cement. Big win for The New Market Leader (Google, by definition).
That leaves the smartphone competitors with a dilemma: How should they respond? "No, we are no longer a smartphone!" Or "Hey, we are also a superphone!" Abandon your gorilla status? No way. Confuse the market? Yes, if you claim to be both. For instance: a mini-van gorilla (Chrysler) is also a muscle car company? Or try this: you claim computers-to-order (Dell) is also computers for corporations plus servers plus anything else computers. Both are in deep yogurt as a result.
STARTUPS BEWARE AND LEARN
Techie startup CEOs respond to such challenges by immediately gathering the tech staff and demanding 100 new features "So we will be hugely better - the Killer App!" Big mistake. Usually fatal.
Street smart startup marketing CEOs respond with one of the following:
- Stick to continuing to focus on the current market segment (while competitors abandon it, moving to the new category),
- Drop everything and jumping on to the new bandwagon (rarely, and only if he sees a great chance to dominate or be a strong Number 2 chimpanzee).
The smart CEOs do not do both. They know that is suicide.
Number 2 is about "re-inventing yourself." It takes guts. Board members will fight the CEO. It takes a convincing plan to convince the doubters. But there are many startups who reach the cold, hard conclusion: "We are not going to win in this market - we have to move on."
BOTTOM LINE: As I said yesterday, each new market (fresh category) will be fought over until two startups win: A gorilla (30% share of market) and a chimpanzee (16% SOM). Sometimes there are two chimps. You have to be confident your startup can become either. If not, close the doors and get a job. Your strategic marketing skills will win or loose these battles. Your core team needs that street smart savvy to win. It will be powered by your company's unfair advantage. That power combined with crafty strategic marketing people result in the Facebooks and Googles of tomorrow. They did it. So can you.
I wish you The Best on your Adventure!