The Need for the Quantum Leap

There are a few business scenarios where one tries to go viral (and of course variations of these):

1. New product for a brand-new market, ala the iPod
2. Emerging market with several players vying for market share
3. Seasoned market with major players (ala the current car industry)
4. Seasoned market with one to three entrenched players who dominate the market

Each of the above requires a completely different Go To Market strategy to obtain dominance.

Geoffrey Moore’s two books, Crossing the Chasm and Inside the Tornado, do a great job of defining the approach to tackle 1 and 2 above.

Chasm

With mature markets that have not only long-since crossed the chasm, they’ve gone on to the Late Majority and Laggards stages, competitors are competing on price instead of outdistancing the competition with value and benefits. A great example of this is in the US auto industry. Major players are seeing market share nibbled away by Hyundai and Kia. These two companies are providing comparable features at a cheaper price and have carved out market share approaching 10% of the US market. Products in this category are a commodity and are part of the mainstay of everyday life or the normal world.

Cars are in this category, computers and laptops are in this category, food, clothing and household items are in this category.

While tackling this market segment can be accomplished using a sound strategy to build a company with solid, steady growth, it’s not a strategy to go viral. Unless you’re Walmart and you’re underpricing the competition significantly, or doing what Office Max and Office Depot did to office supplies a couple of decades ago. (This is a case where major advancements in organization and volume discounting drove costs down, in effect taking over a late majority market by price domination.)

Scenario #4 is even tougher. The dominators in the market are so entrenched that customers don’t even begin to consider alternatives, even at a cheaper price. The only thing available is fringe business, table scraps here and there.

Is it suicide to try to enter a market that is dominated by a couple of entrenched players? Normally, yes.

There is one strategy that can not only take on an entrenched player, but blow them right out of the water.

The strategy: a Quantum Leap forward in technology. This applies not only to software and computers, examples are prevalent throughout history.

In the early days of the automotive industry, Henry Ford dominated with the Model T—until Chevrolet came along with an inline six cylinder engine, which blew the doors off of anything Ford was making. A quantum leap forward in technology.

Henry’s response? The V8. No, he wasn’t the first to build a car with a V8. But he was the first to build a car with an economical V8 in mass quantities. The result? The V8 blew the doors off the Chevrolet and Ford re-established itself as the market leader. Incidentally, the hot rod craze was an indirect result.

In the computer world, the best example is BlackBerry. BlackBerry at its launch was a quantum leap forward, providing email service anywhere executives went, which then filtered down to pretty much everyone in the company with a need for remote communications.

BlackBerry became THE entrenched player in the market place. No one, even with comparable or even incrementally better technology, could touch them.

Then the smart phone came along, first with the iPhone and then Android. Business people began carrying two phones—their Blackberry and their personal phone because the smart phone could do it all—surf the web, email, text, maps, take and send pictures, videos and even video conferencing. And you didn’t need any fancy hardware to support it! The BlackBerry became the second device, and when corporate email could be directed to smartphones, there was no need to carry two devices.

BlackBerry has yet to recover.

It was a quantum leap forward in technology that displaced an entrenched competitor.

The moral of the story: Actually, there’s two.

One, if you’re really seeking viral growth, don’t take on entrenched competitors with a “Me Too” product.

Two, and the big one, If you’re going to take on an entrenched competitor, bring to market a quantum leap advancement in technology that results in customers flocking to your solution.

A quantum leap forward in technology in effect creates a whole new market where YOU are striving to become the entrenched competitor.

Enjoy the ride.

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