The most dangerous competition in B2B sales often comes from an unexpected quarter. I fondly remember working at SCO in early 1990’s, when we held 85% of the UNIX-on-Intel market - an astonishing share of an established market. Of course, we didn’t simply rest on our laurels. We anticipated that our competition might come from the top down - vendors like Sun, HP or IBM bringing their offerings down to our price point, or from the bottom up - Microsoft turning NT into a rock solid commercial platform (which it eventually became), and we defended our territory with these threats in mind.
But it turned out that our most dangerous competition - one that would overwhelm a once-dominant market leader in a few short years - came from an unanticipated quarter - the Open Source movement. The real threat wasn’t well established vendors with well understood business models like HP, Sun, IBM or Microsoft after all - it was a handful of visionary companies who were able to completely disrupt the market with a revolutionary business model. It turns out that we were so worried about the Sharks that we ignored the Piranhas. The lesson is just as relevant today…
If you’re already a significant vendor
If you’re already a significant vendor in an established market, you probably already know your conventional competition quite well - at the very least you’re able to identify them, and you’ve probably found ways of gleaning market intelligence about their actions. You’re might well find yourself involved in a feature/function arms race with these traditional competitors, each one of you striving to deliver more capability than the next.
These are the easiest competitors to identify. Often, they are the easiest to compete against. You can anticipate their moves (and they may do the same to you). You can try and seize the initiative by getting in early, or by attempting to reshape the prospect’s vision of a solution if you arrive late. You (and they) might well find yourself behaving like a bad ass big bully Shark. But if you persist in thinking conventionally - and it’s hard for big and successful organisations to do otherwise - you may be blindsided to the small, nimble Piranhas in the waters around you.
These Piranhas have no respect for your position as one of the existing leaders in the marketplace. In fact, they probably believe that your size offers them an advantage - if they can be more nimble, or if they can see the customer’s problem from an entirely different perspective. They will seek to turn your years of experience into a disadvantage - by throwing convention aside and offering a radical new view of the world.
Your traditional, conservative customers will probably be spooked by their approach. They will probably prefer the calm certainty of a familiar worldview and the comfort of the status quo. But a small (but growing) group of the more original thinkers amongst your prospect base - the ones who are seeking transformational change rather than incremental improvement - may find the ideas of these upstarts attractive. And that trickle - sooner or later - will hit a tipping point, and turn into a flood.
If you’re an upstart
If you’re an upstart, and can offer a truly transformational approach, you’ll find an audience for your ideas if you know where to look. Often the best place is amongst organisations that see themselves as upstart brands with a transformational approach to their own marketplace. There’s no merit in taking the established Shark brands head on: your lateral perspective will find its natural audience. And if those early adopters reflect the way their market is going, they will turn into excellent references for fast followers that seek to emulate their success.
Rather than diluting your attraction by emulating the Shark-like behaviour of these previous-generation solutions, you’ll be better off turning your Piranha-like differentiation to your advantage, and becoming a “Marmite Brand” - recognise that some people will love you for what you stand for, and accept others will run away from you because of the threat you pose to their comfortable certainties.
One nibble at a time...
Sharks can’t afford to stray too far from the current pecking order in their markets. Piranhas have no respect for the pecking order in existing markets. They will eventually overwhelm the Sharks, one nibble at a time. But if they can clear a skeleton in a few frenzied minutes, imagine what they can do to a market that is ripe for change...