Most products bounce off of the Give-A-Damn membrane, sending them hurtling back into the idea-in-the-shower phase from whence they came.
It’s really tough to pierce that barrier of indifference. Most new companies don’t get through it.
The red rectangle is the give-a-damn membrane that protects the innocent masses from wasting time on the hare-brained ideas of entrepreneurs.
There are multiple ways to bypass or break that barrier:
1. Getting someone on the other side interested in what you’re gonna build before you make it.
Kickstarter accomplishes this in consumer markets. Pre-orders accomplish this as well.
Michael Bloomberg pre-sold his terminals to clients before he had them built. Business to business products can be launched effectively this way, too.
You use sales and marketing to venture out into the market, talk to people who might want what you want to build, secure orders from them, and then make whatever widget it was that you promised to give them.
Companies like Gaslamp Games accomplished this with nonexistent marketing budgets through blogging, having the entire company spend time chatting with gamers on forums/IRC, and running fun closed betas.
Marketing means going out and meeting people in your goddamned market, getting to know them, and selling them what they want. It doesn’t have to be done by someone with ‘marketing’ in their job description title.
If you’re following this strategy, marketing should be a verb — not a noun that you use to describe people that does something mysterious in your organization related to buying advertisements.
It should be “they’re out marketing right now, meeting customers” and not “marketing came up with something new.”
2. Making something that’s amazing, selling it to an exclusive group, and then opening it up to a larger market
This takes a special kind of anticipatory talent that knows what the market wants before the market knows it.
The entrepreneur has a wonderful, near-complete vision of an object that will create happiness for huge numbers of people. She may see similar things in the market already, but they’re distinctly inferior to the vision she has in that electrified jelly in her skull.
This is late-era Steve Jobs style entrepreneurship or what the early Facebook team accomplished. I think it’s fair to say, however, that Apple started itself as a company with an approach closer to #1, and evolved towards #2.
If the company creates enough of a mystique around the product, then people will batter down that give-a-damn membrane themselves to get the product. An early air of exclusivity can aid in creating it. Once a company manages to habitually create that magic aura, it turns into a brand that people start to trust, revere, and worship.
Apple products have only recently become price-competitive compared to those of competitors. Facebook began with membership restricted to people with Harvard and then later Ivy League e-mail addresses.
3. Annihilating indifference through superior advertising firepower
This approach is too expensive for most startups, but not all of them. Hollywood, TV, the government, and the music industry all love this strategy, which functions best using the controlled mass media.
Online companies like Zynga have engineered growth this way as well. This method is capital-intensive. Established companies with access to capital markets have a competitive advantage in this kind of method.
These companies need to know a few things:
- How much they make on each additional customer
- How much it costs to get another customer
- At what scale the model reaches diminishing returns
This strategy may utilize brands that were once created by strategy #2. A few artists and writers invented the Amazing Spider-Man decades ago for a small audience of fanatics.
The operation that gets people to give a damn about The Amazing Spider-Man movie in 2012 relies on strategy #3 to tell people why they should buy a ticket.
Which Model Should I Use?
Every company in the world uses some mixture of these strategies at different times in its development. There are certainly nuances that I’ve either ignored or brushed over.
I’ve felt annoyed by a tendency that I see to turn arguments over strategy into religious debates. This is my attempt to correct that.
- #1 works to the strengths of companies at an early stage.
When it’s just two guys named ‘Steve’ trading computers for piles of dollars, it behooves you to get orders as you make the stuff. Otherwise, you could make too much stuff, or get too few dollars, and get kicked out of your garage.
- #2 works well for companies that have already established a brand.
- #3 works well for capital-rich companies that have established a competitive advantage.
If you run a super bowl ad for your cola start-up, Coca-Cola is going to kick your ass. You’ll spend 25% of the money that you raised on 30 seconds of attention, and you’ll piss off a company that will crush you for its own amusement.
Some executive in Atlanta is going to metaphorically break your teeth off, grind them into his Power-Smoothie, and drink it before his sunrise yoga class on a Sunday.
If you’re Pepsi, you can take those punches.
This approach is what a marketing consultant would call ‘inauthentic.’ It’s because you need to rent space from other people who already have some kind of vague credibility to push your message. You need to bribe/cajole/persuade the press to give your thing attention. You have to buy ad space from other guys. The market knows that whoever is pushing your stuff was paid to do it, so maybe they get a little wary of it.
If you’re Coca-Cola, you own tons of factories all over the world. You have the most brilliant flavor scientists in the world on your payroll. You can afford the most creative and effective ad agencies in the world — that know how to sell their products in every country in the world.
So, unless you’re Coke-sized, and you get into a fight with a Coke-scale competitor on their terms, you’ll need to gum your morning bagel for an hour to soften it enough for the enzymes in your drool to break it down so that you can swallow small portions of it without choking.
Mass-market advertising only works well if you have the capital and expertise to fund it, and have the money to out-bid your competitors on the same scarce space that they’re buying. This is why Jones Soda Co. doesn’t buy Super Bowl ads.