Defining “The New Way”
“Find the smallest category where you can be the leader”
Startups pivot, that’s a fundamental truism in Silicon Valley. Most people view the pivot as a vast product change, but the reality is that in the B2B world, the “pivot” can also be a change in the Go-To-Market strategy. This is something we see happening all the time with companies selling to the enterprise. The customer and sales-playbook they think will grow a big business ends up being wrong. This causes the company to go back to the drawing board. When this happens, our advice is simple, start with “finding the smallest category where you can be the leader.”
We say this because it’s easier to build a new business in a category that hasn’t seen innovation. Sounds easy, right? Wrong. Market creation and category creation is hard — if it was easy, everyone would be doing it. But it CAN be done. Just look at the success of companies like Engagio, Marketo, and MobileIron. All of them defined “the new way.”
How to define “the new way”
- Find the new category
- Become a thought leader
- Cultivate the early adopters into a movement by making your customers hero’s at their companies — Marketo did this with the “Marketing Nation” — define the hero journey in your marketing. The customer is at the heart of the content, not the product. How the product is used, not what the product can do.
- Claim victory in the category by getting analyst adoption — i.e. buy-in that the category exists and that you’re the leader
Finding the new category
Finding the new category requires the creation of an adjacency matrix. At the center sits the current product and market opportunity. Around it there is other markets your product could be sold into. Once created, determine which the existing markets are, then cross them out. What’s left will be the “categories of opportunity.” From these begin the process of researching each market opportunity and stack rank them by the size of the market and the difficulty of selling. This should lead you to the ideal new category.
Become a Thought Leader
Once you’ve chosen the category, it’s time to define yourself and your company as the de-facto thought leader. This requires you to define why the “new way” that your product offers matters and how it represents a paradigm shift. This is the time to be provocative, draw the line in the sand and don’t be afraid of making it clear that those that don’t adopt the new way will be left behind.
It turns out people don’t like being left behind. Even more importantly, people like being innovative and being part of a movement.
Becoming a thought leader requires you to produce content either in the form of frequent blog posts, podcasts, vlogs, or a book. At Storm, we’ve seen companies be successful in each of these areas. Perhaps the most important thing to consider here is to make sure you produce content that your target buyer is likely to consume.
Because you’re creating content in a new category, you will quickly own the SEO. An example of how to do this correctly is what Jon Miller has done with Account Based Everything at Engagio. He defined a category, wrote the book, blogged about the category, spoke about the category, and today Engagio owns the term “Account based Everything.”
Create the Movement
Congratulations, you’re now a thought leader in a new category! Your thought leadership has led to a few early adopters who are willing to try your product — and better yet, willing to buy your product. At Storm, we call these the “Pioneering customers” and they are worth their weight in gold.
Think of the “Pioneering customers” as the embers that need to be fanned. Embers that will create a flame that will drive the movement.
Your job is to learn from the Pioneer customers and to ensure they are successful in their adoption of your software. Your goal is to make your pioneer customers into internal rock-stars! Because by increasing the profile of your pioneer customers, you increase the profile of your company. It is important to note, that the relationship doesn’t work in the inverse.
Once your pioneering customers become rock-stars, it’s time to create clear customer testimonials and leverage these customers to sign lighthouse accounts. But don’t just take it from me, here is what Bob Tinker, the founder CEO and current Chairman of the Board at MobileIron thinks:
“After winning our early pioneering customers, we worked our tails off to win our first few lighthouse accounts where other customers would say “wow — you have so-and-so.” The first was a large bio-tech. Then a large pharma company followed. Then a large European bank. They referred us to their peers. Then more and more. Winning the thought-leading customers helped us emerge as a category leader.”
Declare Victory by getting Analyst Adoption
The real value of lighthouse accounts isn’t so much the revenue — though that’s pretty good — the value is that they tend to get Analysts to notice your company. This doesn’t mean you should give away your product to lighthouse accounts, you still want these accounts to seriously use and deploy the product, it just means you want to use these accounts to declare victory in the category. Once lighthouse accounts begin to use the product, competitors will soon follow — sniffing the opportunity in the proverbial water.
Gaining the respect of the industry technology analyst helps to ensure you’re cemented as the category leader by the industry. One of the most common signs of category leadership is landing in the Gartner magic quadrant. At Storm, we’ve had a number of companies gain this recognition, and it helps with winning deals, lead generation, and with hiring the best talent.
You cannot gain the respect of analysts by simply being the first to market.
Silicon Valley is littered with companies like Friendster’s who lose to market leading companies like Facebook. Being first is not enough to win, being first is merely an opportunity to define the category and get an opportunity to own thought leadership before everyone else. In Silicon Valley, it is the company with the best go-to-market engine/strategy that wins, and in the B2B world, though leadership is the best way to start the growth engine. With thought leadership, the new way gets defined, customer hero’s get made and category leadership gets achieved.
