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Elevator Speech: Part 6 of 9: That Disrupt Competitors…

December 16, 2011

With each passing year it seems like I become more politically correct.  That is especially true in regards to this particular point of my elevator speech.  If you hit the rewind button fifteen to twenty years back this part originally read “…and send our competitor’s developers to the food lines.”  It was softened  to “…and bankrupt our competitors” in a later revision.  Unfortunately, neither phrase passed muster when I ended up working yet again at a public company after a successful exit; I had to soften it up for public consumption and for corporate legal to fade back into the shadows.  Being based in Portland, Oregon also required that I apply a “nice” filter as well so I’ve landed on “…and disrupt competitors…”  Let this be clear:  Even though the language has softened, the original intent has not:  I want my competitor’s developers on the street and looking for other jobs; I want to win and second place isn’t interesting.

I didn’t start off having this sentiment early in my career.  I started out thinking of myself as an artist who created what I thought were great works of art, but with my keyboard as my brush, code as my paint, and the computer screen as my canvas.  Customers purchased my art, expressing their enthusiasm for my works by parting with their dollars when they picked up a shrink wrapped box off the shelf that I had helped to create.  All was good and I lived in bliss. I was getting paid to do what I loved.

Then reality kicked in for me…  When it happened I woke up in a cold sweat…  It wasn’t even a realization I came to on my own.  It was something that my managers at an early company I worked for had to beat in to my head.

The realities:  I and the companies I work for are competing for a limited set of dollars out there and if I’m not winning against competitors then they are getting paid and I’m not; in short they are taking food off of my table.   When it comes to software, there isn’t somebody printing money out there for consumers to purchase everything they like.  There really are limited dollars and consumers have to choose between similar solutions vs. purchasing 2 or 3 of everything.  When consumers ultimately chose that means the winner gets the money and the loser doesn’t.  In order to be able to create future works of art my current works have to win enough business against my competitors to fund their creation.  In order to further invest in and grow my solutions I had to take food off of my competitors’ tables and dominate market share.

It was a harsh realization in that it is also a vicious cycle that feeds on itself:  The winners have more money to invest in better and more innovative solutions that win them even more future business while the losers suffer a death spiral to the ground as funding gets smaller and smaller, not only negatively impacting their ability to win future business but their ability to retain existing customers.

So, what team do you want to be on?  The successful team who has increasing revenue and budgets to really invest in even better solutions or the team in that downward spiral where supporting existing customers becomes difficult let alone trying to win new business?

How do you disrupt your competitors?  First of all I believe you do it by delivering high quality solutions on time that are innovative, delight customers, and win reviews.  Sound familiar?  If you’ve been following this series then you’d see that your good works on these first set of items are your table stakes.  That’s the good news.  The bad news is there is still some more work to do.

I’m a strong believer that you have to know your competitors and what they do both better and worse than you do.  In order to know your competitors you cannot be hunkered in your bunker.  You have to proactively solicit input and feedback on their solutions.  This knowledge comes from using their products directly, attending public demos, asking their customers for input, staying on top of their solutions in the press, internet, social media.  You have to leverage this knowledge not by simply playing catch up in a feature war, but by changing the paradigm; simply copying your competitors is boring and from my earlier post remember that the view doesn’t change if you are not the lead dog…

I also believe strongly that you have to admit that your competitors are the enemy.  It’s not the nice thing to say, but it is what it is.  You must benchmark yourself against them while painting a target on them for all in your organization to see and rally behind.  You need to give your teams an enemy to focus on and that enemy has to have a face vs. being a vague concept.  You have to make it an ongoing campaign that you are out there to delight more customers, win more reviews, and take more market share from them.  That winning is the only option and losing is non-interesting.

If you are in the commercial software industry this all probably rings true to you like motherhood and apple pie.  It may seem like an “of course”.  However, if you are in IT, you may be scratching your head and wondering what any of this has to do with you.  The answer is simple:  Your competitors are other IT groups at your competitors, shadow IT groups (CIO at Shell Oil once told me “Beware of pipefitters with CS degrees!”), Systems Integrators, and even some types of outside contractors.  They fight for those same budget dollars you are fighting for each and every day.  Either your business wants to fund you to solve their problems or they are funding your competitors.  Its winner takes all.  Let’s be the winners.

Well, that’s all for now.  My next posts will cover the topic of “…while having fun, being ethical, and transforming the business…

 

About this series:  In my very first post I started out by sharing what I call my “elevator speech”.  It is the gestalt of what makes me and the organizations that I have gone on to lead tick:

Deliver high quality solutions on time that are innovative, delight customers, win reviews, and disrupt competitors; all while having fun, being ethical and transforming the business.

My first post in this series dissected “deliver high quality solutions… It covered deliver, high quality, and solutionsMy second went on about a topic that many development managers and teams hate to talk about and that is delivering “on time… The third in the series talked about solutions “that are innovative…” The forth covered one of my favorite components of the above statement and that is to “delight customers…”  This was followed by “that win reviews…”

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5 Comments
  1. It’s not always a zero-sum game — http://en.wikipedia.org/wiki/Business_cluster#Cluster_Effect

    What if you put your competitors out on the street by undercutting them with prices you can’t sustain, then find yourself without the capacity to serve the market you’ve captured, causing upstream suppliers to leave…in short, what if you end up destroying the very market you’re trying to capture?

    • I would never compete on price in the software industry, nor does this post suggest even trying to do so. Some vendors can and have, but I’ve always been able to drive high margins on high value solutions. My products have never been the low price leaders as I believe that my IP has value and my customers are willing to pay more for that value. Whereas anybody can sell something for $1 that costs $2 or more to build (a recent software industry IPO comes to mind); very few can sustain that for very long as the money will run out. If the money runs out then you have failed in the area of delighting customers, which was one of the primary goals.

Trackbacks & Pingbacks

  1. Elevator Speech: Part 7 of 9: Have Fun… « markslawler
  2. Elevator Speech: Part 8 of 9: Being Ethical… « markslawler
  3. Elevator Speech: Part 9 of 9: While Transforming the Business… « markslawler

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