The Art of ‘Ware [version 2.0] by Bruce F. Webster
[Copyright (c) 1995, 2008 by Bruce F. Webster. All rights reserved. Last updated: 04/30/08]
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Nothing is harder than positioning your product: coming up with the right combination of features, pricing, target customers, and market representation to achieve the desired (or required) revenues. Some of the greatest successes have come about seemingly by accident or luck, while some of the greatest flops have followed tremendous effort, expense, and calculation. It is usually clear in retrospect why some products fail and others succeed, but predicting that in advance remains a challenge.
Sun Tzu spends his seventh chapter talking about tactical maneuvers: how to deploy and shift your forces before and during combat. A common theme: with the right maneuvering, the enemy may no engage at all, thinking his cause is lost before he even fights. And that, as Sun Tzu said, is the height of skill: to win without combat.
Nothing is more difficult than product positioning. The entire company must be united and coordinated in this effort.
This goes beyond how a given product is developed and presented; it encompasses how the company positions itself to its customers, to the press, to the industry, and to the competition. Some of those efforts may tug against or even contradict one another, and there may well be internal disagreements and conflicts over the subject. Add to this the growing realization that markets and economies are chaotic rather than deterministic, and you’re left with the realization that any product release is a roll of the dice; the best you can hope for is to load them in your favor.
The challenges in positioning an unreleased product are first, to misdirect the competition while pushing to market, and second, to find opportunities in roadblocks.
Misdirection comes in two forms. First, you want to keep your true intentions secret as long as is essential, but no longer. Second, you want to release information that influences the competition in the direction you desire.
Roadblocks are the market’s way of telling you that you didn’t understand the customers. This means that your positioning is most likely wrong. Listen to your customers. Learn from them. Don’t keep beating your head against them; leave that to the competition.
Describe an attractive market, then entice your competition to pursue it down a long and costly development path. This way, you can start development after they do, yet get to market first. This is the strategy of misdirection.
Keynote addresses, interviews, trade shows, white papers, and the like can be used to create and promote market concepts for others to follow, while you stay on course.
Product positioning offers both opportunity and danger.
The opportunity is a chance to build and release a successful product. The danger is a chance to magnify the flaws and weaknesses of your company while facing the best of what your competition has to offer.
If you attempt development with too many people and too much planning, you will take too long to get to market.
Each person added to a project roughly doubles the number of possible communication links, especially when you consider that Person A communicating with Person B is not identical to B communicating with A. management structure doesn’t reduce the number of links; it merely introduces impedance, signal loss, error, and noise.
Planning consists of making decisions based on current information. Too often, the amount of planning done is disproportionate to the information available; in such cases, planning should halt until more information is known.
If you attempt development with too few people and not enough planning, critical tasks will go undone.
Critical tasks can go undone for several reasons: lack of someone to do them; no recognition that they need to be done; assumption that someone else in handling them; lack of resources to do them for the person assigned to them.
If you push round-the-clock development for months on end, your developers and managers will burn out or leave. Extraordinary individuals may accomplish their tasks, but the others will get done much later.
Each person has an upper limit on the number of productive hours he or she can put in each week. When that limit is exceeded regularly, no additional progress is accomplished for the extra hours worked; in some cases, less progress is made because of errors due to physical and mental exhaustion. Likewise, suspending vacation time for anything but a very short term is usually counterproductive.
Even on a mid-term, high-intensity development path, managers will be worn out, and not all the developers will finish their tasks.
Your probability of completion is higher, but there are still risks of burnout and losing key personnel.
On a short-term, high-intensity development path, most developers will be able to keep up and complete their tasks.
The implication: seek to break mid- and long-term projects into smaller chunks, with breaks in between. The trick: making that work for large projects.
A development team that does not have the right equipment, supporting benefits, and sufficient pay, will ultimately fail and disintegrate.
In the short term, zeal, pride, espirt de corps, and a chance to change the world can substitute for salary, benefits, and equipment, but only in the short term. Stretch things out too long, and people will lose productivity, burn out, and start leaving. The issue isn’t necessarily compensation per se; it’s how serious management’s commitment to the project appears to be.
If you don’t understand the pitfalls of development, the channels and paths of distribution, and the barriers to customer acceptance, you cannot correctly position your company or your products.
Not the three areas: development, distribution, and marketing. All three are essential; lack of understanding in any one of the three can be damaging or even fatal to a company. If you are building a new company or are running a division within an existing one, make sure you have all three bases covered.
Unless you use or hire people who understand the markets you seek to enter, you cannot take full advantage of the opportunities in those markets.
Imagine, for example, trying to develop and sell products to the Federal Government without having someone available who has prior experience in that market. That example is obvious, but there are equivalent, if more subtle, pitfalls and opportunities in all other markets. Indeed, the greatest danger is assuming that we do understand a given market (such as entertainment) when we don’t.
Product development and positioning are based on stealth and misdirection. Move quickly when opportunities arise; be prepared to shift direction and reallocate resources as the situation requires.
Fast reaction and rapid development have become easier for hardware technology, yet more difficult for software and content. There are reasons for this on both sides. Hardware is general purpose, can be built from off-the-shelf components, and the user interface — wiring, levels, switches, slots, keyboard, mouse — are standard and simple. Software and other content is special purpose, has to live within and interact with an operating environment, and has to provide information in a manner sufficiently robust and complete to encompass its functionality.
When developing products, move quickly and nimbly; when developing technology, establish a broad base and grow solidly out from there.
Develop products quickly, bringing them to market as fast as possible. There are at least three reasons for this. First, you want to give the competition as little advance as possible. Second, the market is now a moving target; a long gap between product concept and product release can result in an outdated, under-powered product. Third, a long development cycle can result in constant adjustments to product features, which in turn can extend the development cycle even further.
Develop technology broadly, making it as complete and as general as possible. Technology prematurely exposed is too quickly copied and usually improved upon by others.
The ideal: steady, broad technology development that pays for itself by a sequence of quickly developed and quickly revised products.
To penetrate different markets, divide up your personnel; to expand market penetration, share your profits.
It is hard for a given individual or group to focus on several markets simultaneously. Devote at least one person or group of people to each market or market segment in which you are seriously interested.
Share profits based on success in a given market with all those involved in achieving that success. This will encourage your marketers and developers to seek ways to find new markets.
First assess, then plan, then act.
This may seem like an obvious sequence of events, but all too often, firms (especially start-ups) do these in reverse order: they develop some technology, create a business plan for turning it into a product, then assess the marketplace to see how to sell it. Be sure you get them in the right order.
Make use of resources outside your company to improve your efforts.
Given the tremendous financial investment personnel and other costs, and the investments at risk, it would be foolish not to spend significantly in this area: seminars, conferences, books, and journals. It would be even more foolish not to use what you learn from those sources. See Chapter 13, “Gathering Intelligence.”
A competitor’s development team can be robbed of morale; their CEO can be mislead and disheartened.
Few things are more discouraging to a development team than to think that a competing product will beat them to market, particularly if it is well-designed, well-implemented, and well-marketed. Likewise, a company’s CEO may reconsider or abandon a course of action based on information about current or forthcoming product plans.
Remember, though, that this sword cuts both ways. Be alert for these tactics being applied to you by your competitors.
At the start of a venture, spirits are high; in the middle, they start to wane; towards the end, the only intent is to ship and be done with the product.
This is as true for your company as for the competition. Be prepared to compensate for this in your company and to take advantage of it in competing firms. The best cure for this syndrome: shorten the product development cycle.
Avoid engaging the competition when they are full of zeal; press them when they are tired and worn out. This way, you can maintain an emotional advantage.
“Ignore” may be even better than “avoid engaging”; a fired-up competitor can gain more energy from the responses provoked from you. Likewise, when a competing firm has morale problems and internal dissension, that is the time to appear most formidable to them; it will push the development and marketing teams to collapse.
Stay focused and tight when the competition is disorganized; stay calm and steady when they are confused. This way, you maintain a mental advantage.
There is a trend in our industry to react to the constant barrage of changed and developments. While nimbleness is a virtue, Brownian motion is not. Few markets vanish overnight, but your customers (and stockholders!) can if they lose confidence in your focus and stability.
Pick your position and make the competition come to you; let your personnel rest while the competition drives hard to catch up; conserve your resources while the competition depletes theirs. This way, you can maintain a material advantage.
Seek to make the competition expand their resources — money, time, mind share, developers — while you conserve yours.
Don’t seek to compete where the competition is well organized; don’t pit your small resources against their large ones. This way, you can maintain a positional advantage.
If you drive into a brick wall, you may damage the wall some, but you’ll hurt yourself a lot more. Look for the weak spots, gaps on the wall — or drive around it completely.
In product positioning, don’t go broadly against well-entrenched or well-supported competitors.
You can go broadly against a weak competitor, but you can go with a tight focus against a strong competitor. But if you go broadly against a strong competitor, you won’t get a lot for your efforts.
Don’t go up against their best development efforts.
Even if you beat them to market, you may end up paving the way for them, allowing them to take advantage of the pioneering and consumer education you’ve done.
Beware of abandoned markets and deserted customers.
There are opportunities there, but be careful: companies don’t usually leave customers and markets out of ignorance or stupidity. Be sure you understand why the markets where abandoned, lest your fall into the same problems.
Don’t block the competition’s exit from a market or product line. Give them a graceful exit from competing with you. Don’t press too hard against a competitor who’s withdrawing.
Don’t give your competitor a reason to resume or continue competition. They may re-enter the market out of stubbornness or pride, and even if they don’t do well, they can undermine your success through heavy price-cutting.
f you understand stealth, misdirection, targeted development, and speed, you will succeed — this is the art of product positioning.
The trick is to fool the competition and not to fool yourself. Unfortunately, the reverse happens quite often: companies begin to
believe their own hype and wake up only when competitors seize market share and sales plummet. Some don’t even wake up then.
The last maxim does summarize correct product positioning: plan secretly; misdirect competition; focus your development; execute quickly. This won’t guarantee success — usually, too many factors outside of your control are at work — but it does maximize your chances of success.
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