Sharpen the Saw with a Market Assessment

Cutting edge

Once upon a time, a strong, hard-working, woodsman was trying to saw down a very large tree.  After several hours he had not gotten far when a wise farmer looking on made an observation. “You’re not getting anywhere, because the blade of your saw is pretty dull from all the sawing. Why don’t you stop for a few minutes and sharpen the saw?” The farmer angrily replied, ” I don’t have time to stop and sharpen the saw!!  I’m in a hurry to get this done!”

When it comes to launching a new business unit or product/service offering, most enterprise technology companies are like the woodsman in this story popularized by Steven Covey in the Seven Habits of Highly Effective People. They don’t want to stop and do a market assessment. They just want to jump on in, put the business/go-to-market/product development plan together, and get going. What they don’t seem to realize is that the market assessment is the sharpener. Rather than slow the process down, it ultimately speeds it up. I’m dealing with a “woodsman” client as we speak.

I recently put together a market assessment project charter and work plan for a client that wants to create a SaaS version of its successful enterprise software product.  We haven’t had a chance to sit down and go through it together yet, but in looking at the anticipated work effort, I’m envisioning the conversation. I know what’s going to happen. I’ve been in his shoes as the client executive taking a big gulp at the projected timing and cost of market assessment/research work.  He’ll say what I’ve said:  “No way. We don’t have time. That’s a preposterous amount of money. We’re immersed in the market. We know enough. Let’s skip this and start executing. We’ll tweak as we go.”  So I’ve been trying to figure out how to convince him we need to do this.

Backing up a step, this is further complicated by the fact that a market assessment wasn’t even on his radar screen. He initially called me in to help him create a business and go-to-market plan and then eventually help launch this new offering.  It’s even further complicated by the fact that he is a fabulously let’s-get-it-done kind of guy. (I love people like that.) His ideal launch date is yesterday, and anything that extends the time line feels like an obstacle.

Beyond using the woodsman story, I had been stumped with how to get the importance of a market assessment across to him until recently when I read a wonderful profile in the San Francisco Chronicle on my dear friend and colleague, Stanford Professor Tina Seelig. In there, she mentions this quote attributed to Einstein: “If I had an hour to solve a problem and my life depended on the solution, I would spend the first 55 minutes determining the proper question to ask, and five minutes thinking about solutions.”

That captures the importance of market assessment work. When done thoroughly, the answers present themselves: which markets to pursue, how to position, what to offer, which functions and features are/aren’t necessary, how to differentiate, what the messaging should be, etc.  Always start by looking at the market, talking to customers and prospective customers, talking to people who study the trends and have a bird’s eye view, talking to people in the trenches, and talking to market influencers. Read secondary research, articles and blogs. Look for patterns and themes. You don’t need to spend years on this. It may take a few months, maybe weeks, perhaps even just days in some cases. My rule of thumb is to stop once I am no longer hearing new information. If I’m digging around among a bunch of different sources, and the same themes keep bubbling up, I know I’m set. In addition to capturing the findings, keep a list of the key influencers and powerbrokers you’ve run across who seem to call the shots in that market. You’ll need those when you’re ready to go to market.

The benefits of the market assessment work extend beyond giving you input for the product or business rollout. It’s the gift that keeps giving. Here are some examples:

  • The team that did all of the digging now possesses deep subject matter expertise that will come in handy during product/service offering development, selling activity, marketing content and other downstream activities.
  • You now know who the market influencers and powerbrokers are in your target market – who’s talking about it, who follows it, who is expert in it – these people, publications, companies, events, etc. may later become sales or marketing channels for you.
  • A lot of people in the market place now know you intend to play in that sandbox and are primed for when you come back with an update on what you have – these could become evangelists for you in the market.
  • You’ve gained a lot of pre-sales customer intelligence from these conversations – now you know who might be interested in the offering, profiles of companies that are ready, what their pain points are, etc.

In other words, you’ve just created accelerators for your product/service offering development, sales and marketing activity.

So before you even get started, sharpen that saw – go talk to the market.

A Quick Brainteaser: Can You Tell the Difference? (Bonus Round: The Cupcake Challenge)

Let’s start with a picture of this child. Take a close look.

Differentiation Brainteaser 1We’ll be coming back to him in a moment. But first, we’re going to play a little game called the Cupcake Differentiation Challenge. Feast your eyes on these tempting cupcakes.

B2B Differentiation Brainteaser: Cupcake ChallengeThey are all red velvet cupcakes, but each is made from a different recipe containing different ingredients and flavors. The game is this: You must pick the most delicious tasting of the bunch. If you succeed, you win $100,000. If you don’t, you owe $50,000. You can’t sample them in advance. You have to pick based on just looking at them. How would you do it? (This is all hypothetical, of course. Don’t send an attorney to collect your winnings.)

What’s that, you say? They all look the same? You can’t know which is best without trying them first? Yes, it does feel like a high-stakes crapshoot. A little stressful, eh?

Gee, I wonder who else goes through this. Oh, that’s right…It’s your buyers every time they are choosing between you and the multitude of other offerings exactly like yours.

Now let’s go to a different shot of that little boy you saw above.

B2B Differentiation Brainteaser 2 Oops, that’s not the same little boy. It’s his identical twin. Without scrolling up and cheating, can you discern what makes this little boy different from the other one?

 (Jeopardy music playing in the background)

How long did it take? Or did you give it a try and quickly give up? Did you simply find it impossible? (If you’re still looking, scroll down for a side by side comparison.)

The differences in many identical twins are so subtle that you have to have intimate knowledge of them and be around them quite a bit in order to pick up on what makes one different from the other. In fact, often they, their parents and perhaps their closest friends are the only ones who can discern the differences.

If your offerings and/or company aren’t clearly and obviously unique at a glance, your customer will see you and your competition as identical twins. Even if there are differences, your prospect has neither the time nor the inclination to do a detailed exam and comparison to discover them.  The prospect is going to take a quick look, decide that you are identical to one another, and buy based on price. They are not going to invest the effort to actively seek out the differences. Or they will find irrelevant, arbitrary differences that influence them – your competitor shares the buyer’s favorite hobby or alma mater, or some other arcane factor. Your odds of winning business become a game of price and random chance – not a good basis for achieving sustainable growth.  Not a basis at all for growing margins. You are merely another face in the crowd, another me-too.

On the other hand, if you pop out – if you’re truly unique in your ability to solve a particular and pressing customer problem — you will get the buyer’s attention. More importantly, you will get the broader market’s attention, and buyers will start seeking you out. In a crowded market, this is an important first step toward sustainable growth and margins.

I’ll talk more about how to clearly differentiate yourself in upcoming posts.

B2B Differentiation Brainteaser side by side

Is this what your prospect sees when looking at you and your competitor?

Bill Gates, Warren Buffett, and Moats (yes, the castle kind)

There is so much to say about this LinkedIn blog post by Bill Gates that I don’t know where to start. First, the humility of it is marvelous. He’s essentially self-made and at a very young age, at that – an entrepreneur. On and off, he’s been the richest person on the planet. His foundation is so effective that Warren Buffet decided to hand his wealth over to it rather than start another. And yet, Bill Gates decides to use his first official blog post on LinkedIn to talk about what he’s learned from someone else – Warren Buffet. Beautiful.

I also love the nuggets he picked out. One is the moat metaphor. Warren Buffet taught him to think of a company’s competitive advantage as a protective moat and to look at whether the moat is shrinking or growing. He talks about it through the eyes of an investor, but we should all be doing it for our own companies. Are we adequately differentiated? How sustainable is it? How quickly are other companies catching up? How is the market changing and what will that do to our moat?

Another interesting aspect of this post is that it demonstrates LinkedIn’s strategy of providing useful content to increase engagement. Judging from the number of views, likes, comments, etc. on this post already, I’d say the strategy is working. LinkedIn wants to be more than just a tool you use while job hunting. It wants to draw users in on a daily (or more) basis. It was a coup getting Bill Gates and similarly high-profile people to agree to participate. IMHO, LinkedIn has only begun to scratch the surface of its full potential, particilarly as a B2B sales and marketing tool. That will come with time, esp. once they break out of the recruiting mentality and really open up their thinking. I can see a day when it replaces But I digress…

Back to Bill Gates. One more observation, and then I’ll make myself stop: The hook is great. He gives you a two-fer – Bill Gates and Warren Buffet. The post is almost impossible to resist. And the title promises big value: Three Things I’ve Learned From Warren Buffet.

It’s a quick and easy read. But you’ll get more out of it if you take a few moments to really think about how you could apply each of his three tips to your business, job and life. Enjoy.

Are You On Your Way to Market Dominance?

Take the Test:

  • What does your companyiStock_000017605136Small stand for? Can you state it in one sentence? One word?
  • Would we get the same answer from each of your employees? Clients?
  • Why should a prospective customer turn to you instead of someone else?
  • What can you say about your capabilities that no one else can say?
  • Do your proposals, marketing materials, website, etc. have a unique voice?
  • Do you have such a strong market position that clients actively seek you out, and you are able to name your price?
  • Why should a talented recruit select your firm over another?
  • Why would someone pay a premium for your stock?

Very few B2B companies today can answer these questions in a manner that clearly sets them apart from their competition. A large part of the problem is that companies are afraid to place their bets — focus on a specific well-defined market space and offer a specific set of solutions aimed at solving specific problems. But this is necessary, if they are going to build a defensible market position with a footprint so unique that no competitor will be able to match it.

As you work on your strategic plans, positioning, messaging, offerings, etc., aim for the answers to these questions, and you’ll be on your way.