Bill, it's game time again.
Let's get on the court.
You are a competitive person.
Oh, absolutely.
Your favorite place in the world is the West Fourth Street
playground.
Yeah, the cage in Greenwich Village, New York City.
Been there many times.
So the natural question is, how come
we haven't talked about competition so far
in the process?
Well, that's a really good question.
I get it all the time.
It's not that competition is irrelevant.
The question is, when do you think about it?
And John Wooden, also a great basketball coach,
the greatest basketball coach ever,
always said, focus on what you can do.
Do what you do best.
Don't focus on the competition.
And there was a great book called Blue Ocean Strategy
which emphasized the same point in the business as well.
Focus on the customer because that's
where the value will be created.
If you focus on the competition, you'll
start making the same mistakes they do.
And at the end of the day, they're
not the ones who will buy the product.
They're not the ones who will generate the value.
It's the customer who's the final arbiter of success.
But at the same time, Bill, when I go to a store
I do evaluate options.
There is competition.
Oh, you're absolutely right.
I mean, we're not going to ignore competition.
But the question is, when do you start thinking about it?
Now, after we've really understood the customer,
we've started to think about what value we create.
Now, we're going to think about why is our product so much
better than anybody else's product?
And why will it sustain that advantage over time?
So now we're bringing it in.
But we don't start with competition.
It is important to bring it in.
We start with the customer.
Entrepreneurs often get asked the question, who's
your competition?
Who's your competition?
Now, on the one hand, you can over-obsess about competition.
But on of the other hand, you can miss out
on thinking about the competition in useful ways.
What's the right balance?
Well, I think, first of all, the number one competition
that entrepreneurs face is the do nothing option,
is that they just do what they're doing today.
I think that's what you really need to focus on.
What sometimes people do wrong is the company
at MIT worries about the company at Stanford
who's doing the similar thing that they are.
But both of them have just a small, small part
of the market.
And the real market opportunity is that 99.999% of the market
that neither of them are getting to.
So they shouldn't be focused on each other.
They should be focused on the market opportunity that
represents the much bigger opportunity than fighting over
this very, very small piece of the marketplace.
So, worrying about the customer takes you out of that obsession
about, is our technology better than their technology?
Is our product better than the other competitors' product?
It gets you focused on the customer.
But still, when the day comes, you
have to provide some unique value.
And that was the whole point of the core.
But now we have to relate that core back to the customer,
that it's going to produce something
of significant value for them that will make our product more
attractive than the alternatives.
I think we have some great background here.
Now, do you have a simple process
for charting your competitive position?
Yeah.
After talking about this with many teams,
including my own companies, I came up with a very simple way
to do this that I think captures the essence of it.
We take the persona, and we take the number
one thing that they care about, that thing that
keeps them awake at night, and the second thing
in their priority list.
And then we take them and we put it into a two by two matrix.
We take the most important on the bottom x-axis
and the second most important on the y-axis.
All right.
So you take the two most important priorities
of your persona, which you should know by now,
and you plot them on the axis x and y?
Exactly.
And not only do we know it from the persona,
but we validated that through the identifying the next 10
customers.
And so we lay them out on the axis.
And bad is closer to zero and good is further out.
And then the same thing for the y-axis.
Bad is down here.
So it's a reliability.
This is low reliability, high reliability.
If cost is the second thing, it's high cost, low cost.
And then the upper right hand quadrant
means it's good in both dimensions.
So, now what we do is we take and we
start plotting first the as is state.
What is the current state?
And where does that fit in there?
And then where do the other competitive alternatives
fit in there?
And then we plot on there where our solution is today.
And then where it will go over time.
And our solution better be in the far right hand corner
when all is said and done because that's
what our core does.
Let me just play skeptic for moment.
What if the decision making process by the persona
is more complex and there are more priorities than just two?
And you'll run into difficulties of charting
this multi-dimensional space.
That's will come up in your customer interviews,
your primary market research.
But you have to focus on the top two
because people won't hear you if you're
talking about priority number three.
And if you try to do too much, you end up doing nothing.
So we really push people to focus on number one and number
two, because if you get those right,
the customer's going to be listening to you.
You have a good shot.
So we have to have clarity of message,
not just externally, but clarity of message internally as we
think about developing the product
and how we're going to service that product and everything
else around it.