DCVC Partner Alan Cohen has a wealth of experience building strategic marketing initiatives for companies. The following is a repost of his thoughts, originally shared on Medium.
Like many people sheltering-in-place during the coronavirus pandemic, I absorbed The Last Dance docuseries about Michael Jordan and the Chicago Bulls chasing their 6th and final NBA championship. The wickedly incisive series — peppered with telling raw, behind-the-scenes footage of MJ and crew — reflected a seemingly bygone era in a traditionally competitive sport, one where an alpha imposed its will on the pack. In Jordan’s world, winning was everything: more than the love of the sport (or was it love of the sport?). Most players were not friends. Teammates were the most important relationships and winning was the binding credo. Don’t believe me: ask Patrick Ewing or Charles Barkley about that time.
Basketball is a great analog for a lot of marketing battles, particularly in B2B tech with tightly-knit teams. Today’s NBA is extremely competitive, but players are traded frequently. There’s general collegiality around the league: everyone is always texting each other and commenting on social media. Similarly, the half-life of so many startups — or career tenures in larger companies — are measured in years, not decades. People expect to be working with a lot of potential competitors sooner than they used to, or even get acquired by one.
While tech is competitive, the nature and intensity of competition seem to have lost its visceral, zero-sum edge. Traditional frontal product battles (head-to-head competition) appear less often. The competitive drive shifted heavily from the amygdala to other parts of the frontal lobes. In a Darwinian sense, this could limit many companies’ outcome.
Categories Matter; Winning Matters More
Many of today’s marketing discussions are fixated on category creation, the ability to win mindshare without the trench warfare traditionally associated with marketing battles. Go channel Sun Tzu: know your enemy and know yourself and you can fight a thousand battles without disaster.
Don’t get me wrong: category creation matters — I know first-hand. Let’s look at how categories played in two industries that were rife with competition: networking and SaaS.
We invented network virtualization at Nicira while the rest of the world focused on software-defined networking (SDN). This presented a core form of differentiation that had the world comparing Nicira to its ultimate rival (and eventual acquirer) VMware, the king of virtualization. We ignored an endless list of start-ups chasing SDN (no one aspires to be the tallest 5‑year old). Yet what ultimately made Nicira valuable was the power of its technology in situ of the category we presented. The endorsement of large customers (Fidelity, AT&T, NTT, eBay, etc.) was our street cred. We had good technology, but we also had a clearly defined enemy that we wanted to displace Cisco, the 800-pound gorilla of networking. Ultimately, we were telling the market: replace Cisco hardware with our software.
Category creation — and extension of brand marketing — is a core part of the positioning stack. But increasingly marketers forget customers buy products and services, not categories (they might rejoice in categories). The iPod was a better MP3 player (size, navigation, playlists): game over, Diamond Rio.
Much category work lacks the personal rivalry that has driven some of the biggest sectors of tech marketing (infrastructure, software, etc.). It lacks the visceral brand attachment we see every 5 – 10 years when rivals go at each other and build markets. As consumers, when we think about great rivalries, we think Coke v. Pepsi, McDonald’s v. Burger King, Hertz v. Avis, the Lakers v. the Celtics (Magic v. Larry!). In tech, though, who can forget the competitors and leaders of the past 20 years:
- Apple v. Microsoft (Steve v. Bill)
- Cisco v. everyone (John Chambers v. everyone, politely)
- Salesforce v. Oracle/Siebel (Marc v. Larry)
- Google v. everyone (Larry and Sergei v. the world)
- AWS v. Azure (Jeff v. Satya)
Just like sports, great marketing is either a game of inches or yards: depending on the playing field and how the game is executed and whether your company is the alpha. If you cannot build a competitive space and mindshare: it is inches — expensive and often injury-prone. If you offer a compelling and concrete choice (clearly you cannot compete nor call out the market leader without a great product), you have the opportunity to throw for long yardage. Leading a category is about having the perceived best product, building a strong community around it (your fans), and changing the way the game is played (like the Bulls did).
With Salesforce, it wasn’t just that they had a different CRM system competing on features, they changed the game and the conversation to something bigger. They weren’t “software” (remember the button, no software) with tit-for-tat comparisons anymore, but about business models, serving customer needs
Ultimately, though, you are playing for wallet share, whether it is taking it from an incumbent or diverting spend from something else. Great marketing, like a star athlete (which marketer doesn’t want to be like Mike?), must live with 3 cardinal rules.
- Customers like comparisons (products, experience, status)
- Customers like drama (underdog v. giant incumbent, innovator v. laggard)
- Customers like brands (archetypes, self-identification)
Customers Like Comparisons
No two people are exactly alike (even twins). We dwell in a self-imposed state of individuality. Yet most people yearn to be part of a larger tribe. Every hour of our lives we are faced with choices and decisions.
When bringing a product to market, there is a temptation to tout your individuality. The three worst words in marketing are “we are unique.”
Steve Jobs did not introduce a “new communications device” in 2007, he gave us a “revolutionary mobile phone.” Today we see the iPhone as the Hitchhiker’s Guide to the Galaxy, but its creators made it easy for buyers: check out my version of a mobile phone. He effectively called out Motorola, Nokia, Samsung, Sony, RIM (Blackberry), and others. He first showed the field he wanted to play on to ensure everyone was on the same page, and then he changed the game.
Even in crowded markets, powerful, visceral competition can vault a great competitor ahead of the pack. In 2003 (wow, that is a long time ago!), my company Airespace ran past a crowded field of 10 new WLAN entrants to go from an idea on PowerPoint to the number 3 player in the enterprise in a few short years. Eighteen months after we started shipping, we reached roughly a $70M/year run-rate and held the solid number 3 position in the enterprise WLAN market and number 2 in the centralized WLAN category (see, categories do matter).
How did we pull this off? We picked one attribute of our platform, management of the RF, the “air space,” as the defining theme of our entire go-to-market. While we did lots of other things (security, management, etc.), we made the air space the wedge issue. The company helped customers tame the area of this relatively new technology that they understood the least, radiofrequency.
Salesforce did the same in the early days. It didn’t talk about its CRM features (as much as they would fall short vs. the bigger players) but picked wedge issues such as the move to cloud and subscription consumption. Then they hammered it home over and over again in creative ways, including public protests of Siebel conferences.
Customers Like Drama: Give Yourself to the Dark Side
At its best, marketing both clarifies (buying) decisions and entertains us. Two or more companies fiercely competing for your dollars presents buyers with players who innovate and deliver great. In tech, category-defining buyers want innovation.
During the market entry phase, many buyers are looking carefully at how plucky startups will fare versus sleepy incumbents. It is the lack of innovation or slow product cycles that give rise to new entrants. In this phase, you have to tout yourself as being the first or only one to do something innovative, or you have to change the buyers or buying cycle. Salesforce’s initial “no software” was a throwdown against CRM vendors Oracle and Siebel. Its product was software. But they chose a challenger position initially by targeting salespeople rather than IT as direct buyers. Not only did they initially create drama with bigger rivals we created drama within companies about the purchase decisions.
At Airespace, the vendor drama was a bare-knuckled affair. Airespace had a great product, but so did our biggest startup rival Aruba (although we never publicly acknowledged it at the time). We, however, sucked up more than our share of public oxygen and multiples higher sales through aggressive issue reinforcement, including content marketing, founder personas, PR, and public recognition, bolstered by 16 consecutive product awards, bakeoffs, and reviews. The market loved the drama, and we played to win with a team that wanted it more than any other player in the market. We were the alpha predator in the market and played every day like it was our last.
Drama is not only delivered through competition, but through user experience, consumption model (e.g., as-a-service), imagery, advertising (internet/email or television), or purchasing experience.
Customers Like Brands
Brands are important for how companies portray themselves, but they are more important for how buyers self-identify with both companies and their products.
The 12 “brand archetypes” are some of the most powerful positioning thoughts in marketing today and come to us from the advertising industry. If you are a new market entrant, picking and adhering to an archetype is a powerful penetration strategy. This part of brand marketing more about how your customers identify with you and less how you describe yourself.
When Nike entered the market, they identified with athletes and raced to the hero archetype. By the mid-1990s, Cisco Systems took on a ruler brand and identified itself with the internet (virtually all internet traffic runs over the systems of one company, Cisco Systems). Google is a sage brand.
Brand is important to think about, especially if you want to stand the test of time. Many companies come and go because they don’t focus enough on creating a tribe of people who identify with or love them. They become transactional brands, which means that the moment something better comes along, customers happily hop to the new new thing. And there will always be a new, new thing.
You pick your fights. If you want to win the NBA championship of your category, you have to earn in, building the product and team that take you all the way Clear targets and competition motivate employees and clarify decision making. Even if you run the race by yourself, you need to want to train with the best. The greatest sports competitor of our lifetime was an alpha predator, a ruthless strategist with a zero-sum winning mentality. And he was a great marketer, who controlled everything about his message and brand, over 18 years since he retired.
Thanks to two great go-to-market executives, Robin Daniels and Jamie Catherine Barnett for review and commentary on this blog.