In the previous blog, we learned about the Whole Product Model and the importance of tactical alliances and partnerships that grow your product from the ‘Generic Product’ to the ‘Potential Product’. In this blog, we focus on understanding the competition and the existing market to lead our product to the top of the market space.
A truly innovative product does not have any competition. If we have competition, we ought to dig deep and learn about who they are. If we do not have any competition, we must create our own.
It starts with understanding the consumer’s psychology. With innovation and the introduction of new technology, resistance is inevitable because people fear change. For visionaries in a company, change is actually favourable as they are the champion of change. The pragmatists within the same company are the competitors to the visionaries who stick to the status quo. These two groups negotiate for risk and reward among themselves.
In the mainstream market, the majority market, the pragmatists have the most amount of power. Decision making relies heavily on comparison of products and services in a category. So there is no surprise that evaluations include checklists and rating systems. All of these lead to a healthy competition in which our product must meet the pragmatists’ criterion to not only make the sale but be the best among other options.
So we know the visionaries want something different and the pragmatists want something that is almost the same as all others but even better: catch-22 again!
Crossing the chasm in such a scenario relies heavily on the strategical transition from having product-based to market-based values.
To make this transition we have to use two competitors as indicators for our value proposition. The first must be the market alternative, a vendor our customer already buys from. The goal is to provide a “better” solution to the customer’s problem compared to the market alternative. The second competitor is the product alternative, a company that provides a product similar to ours. The goal here is to let your potential client know that another company is accomplishing similar tasks with their product.
An example of a company that had a market alternative and a product alternative is Box. Box provides file-sharing services for the enterprise. When Box started offering its products, the market alternative was Microsoft Sharepoint and the product alternative was Dropbox. Dropbox was a better-known brand however its usage focused on personal file sharing. Microsoft Sharepoint has its own configuration and setup difficulties. Box entered the market as a cross-section between SharePoint and Dropbox.
If it seems impossible to identify these two competitors, we must take it as a sign that we are not there yet to cross the chasm. To position our product in a market, creating competition is key.