Calling out the elephant in the room – Assumptions – 2

arrogance, Assumptions, B2B, Business, ego, Marketing

For a background to this post, I would suggest you have a look at the fist part of the topic here

Not many know that the digital camera was first created by a team in Kodak. Whether you call it arrogance on the part of the managers at Kodak, who assumed that no one would want to buy such an expensive camera. What was assumed was that the technology would make it unviable for most folks to afford the camera.

No one thought that technology was following Moore’s law, where the power of the chip was roughly doubling every 18 odd months. A similar thing happened at Xerox who actually had designed the “mouse” long before it became a standard accessory. But they never moved forward on it.

It is said , the Swiss already knew about battery powered watches, much before the Japanese, but because they prided themselves on their engineering and movement, they never bothered taking a patent. Suddenly the Japanese were all over the place with watches leaving the Swiss, gasping for breadth. Again technology assumptions can go wrong very badly.

Brainstorming on the assumptions you are making and listing them, gets you grounded to think better. Also its a better idea to ask an outsider to check out your assumptions.

In marketing, because you are dealing with human perceptions, understanding and accounting for the assumptions can help you avoid expensive mistakes. In B2B scenarios where there are multiple people involved in a decision and there’s general inertia, not accounting for these assumptions can be fatal.. Its a good idea to keep asking ‘what else are we assuming”.

Like assuming that the person on the production line will easily adopt the new technology you are bringing in via the CIO and /or the CFO. More IT projects have failed because of these faulty assumptions than the problem with the technology itself.

Especially when you are making the marketing or sales plan at the beginning of the year, if you don’t account for these assumptions, very soon when you hit the road, all your plans will fall flat.

Don’t make the mistakes that I have done. Whenever you make a plan list out all the assumptions and make everyone aware about them so that collective wisdom can find a better solution.

Till next time then.

Carpe Diem!!!

Calling out the elephant in the room – Assumptions

arrogance, Assumptions, ego, Marketing

Whenever you are doing an analysis of the market or doing a post mortem of why an iteration did not wok out, one of the biggest things to bring out in the open is the “Assumptions” based on which you have chosen to take an action.

A simple mathematical example will show the problem. Most often people like to say the market for some broad category is X billion dollars per annum and growing at Y percent. Now you have chosen a niche in the segment whose market size could be 20% of the X billion dollars. Suddenly you have lost 80% of the market size. This could be growing at 50% of Y per annum. So assuming that X billion was the market today and it was growing at CAGR of 12%, then this category would become 2X in 6 years.

Now your chosen niche however is only 20% of the X billion dollars and this is growing at 50% Y or 6% rate. Which means this market will double in 12 years. Suddenly your niche is not so attractive as the overall category.

Now suppose that the growth rate is dependent on the availability of a key raw material which comes from only one country and if there’s a problem in the production of this product then this growth rate could become 10% of the projected Y or 1.2%. At this rate the market will double in 60 years and it may not be worthwhile for you to invest in the market at all.

Yes you could come back saying what is the probability that this scenario would occur. Maybe not much. However if you don’t identify it and list it as an assumption even though the odds are low, then you can be caught completely unawares if that scenario plays out.

In marketing – Murphy’s law – paraphrased by me – if anything has to go wrong, it will and at the most inappropriate time – always plays out. Most of the times it is sheer laziness on part of the team or sometime even arrogance / ego which causes us to not list out the assumptions. This happens especially when we have had a string of non-stop successes.

If you call out all the assumptions that you are making, then it becomes far easier to plan and execute on your strategies.

In technology buying a very small dependency like availability of trained resources to work on the technology can cause your product to not get the same traction. I remember the RDBMS market was growing in double digits about 20 years back, what with UNIX, Windows and Linux all giving an impetus to the growth. However there were 2 companies which took a major portion of the market because the other companies did not realise that the trained manpower needed for running these RDBMS was not there. even though most of these RDBMS were very good, they were not able to garner any worthwhile marketshare.

Inspite of the fact that I am writing this post, I have also happened to miss assumptions a lot of times. And chances are that the assumption I missed calling out, was the one which came to haunt me for the failure.

Till next time then.

Carpe Diem!!!

Asking questions in the market – 4

Marketing, messaging, Positioning, Questions, route to market

Over the last few posts I have been talking about how better questions can make a difference in the success that you achieve in the market. While my focus is on the B2B market, the general principle will apply to any market.

Today the questions I am talking about would help in making your messaging and route to market better. It will then help you identify the constraints you can face, the models you have to apply etc. Again I would highly recommend Dean Jackson’s Morecheeselesswhiskers.com podcast and his & Joe Polish podcast ilovemarketing.com

1. Is the product or service that you are wanting to sell going to be used as a first time buy. If someone has never used a motorized vehicle then a 100CC mobike is a first time buy for them. Trying to sell them a 650CC motorcycle will not work.

2. Will the product be an upgrade or replacement. If you know the customer is already a user of your Air Conditioner for the last 5 years then they could be ready for a replacement or upgrade. In IT is called a refresh cycle which each company decides.

3. Will the product or service be for emergency use. If a tornado strikes and there’s a damaged roof or water in the basement then you need to get it out NOW. Then there’s no time for evaluation of multiple options.

4. Will the product be an accessory to a key product. Smart phone covers are an every day example. So you need to be able to reach those buyers who use the phone for which you have the covers.

5. Will the product/ service be for the repair of an item. Duck tape is a very good example of this or a tyre repair shop.

6. Is what you are selling aspirational in nature. Then you have to target the people who already use something and may now have the money to aspire for something bigger or because their families or job responsibilities have changed. Aspirational is a little different from upgrade in the sense that upgrades are generally considered incremental in nature.

There could be some specific scenarios which apply to your business and have not been listed here.

Once you can map where all your product or service plays, you can design the market route, the messaging etc.

Generally I keep my posts short so you can read them while waiting in the line to get coffee. This one has become slightly longer. I hope its useful.

Let me know your views.

Till next time then.

Carpe Diem!!!

Asking the right questions in the market -3

B2B, Business, ideal customer, Marketing, Questions, Technology

I have had a lot of situations where we thought we had an amazing product / service but we were not getting a response from the market.

We tried various scenarios, tested various markets but the response was just not there.

In B2B technology services, you may have a wonderful product or service, which is well differentiated but the market does not respond to your service. This inspite of the fact that you are looking at a very small niche, you have identified your Ideal Customer (the person / role) and talking about the pain points that they may have.

The reason for this as I have explained in my earlier posts is that technology companies follow an “infrastructure” or “ecosystem” model. Which means if your product / service does not easily fit into the existing infrastructure then the adoption will be very low.

In this situation instead of asking questions like is this the right market to focus or does this market have the ability to pay. The questions that need to asked could be more oriented towards what could be preventing the audience from responding to your messaging.

Is it that you don’t explain how you fit into the “infrastructure” or is it that they feel it will be too much of an effort to even think about your product / service. To be able to analyse this you need to sit quietly and brainstorm all the possible reasons which could prevent them from interacting with you.

Once you list all the items then quickly start testing to eliminate each of the issues and see which ones have the most impact.

Most often I have found, the reason for not getting to the right answer has been the fact that I had not reached the right question. Once I had asked the right set of questions, things were generally a cake walk.

Till next time then.

Carpe Diem!!!