Overhype: First mover advantage

“Could you please Xerox this page?”

“Please switch on All-Out”

“Wash it with Surf”

“Stick it with Fevicol”

Many of the first mover brands have become so successful that we associate the product category need with them. Sadly this brand recall often does not translate into product sales and consumers are agnostic about which brand of Photocopying, liquid mosquito repellant, detergent powder, adhesive they use.

Couchsurfing has been in existence for a decade helping travelers to find economical safe accommodation. However it needed a late incumbent like AirBnB to come up with a commercially viable business plan that took care of the issues like billing, security, advertising & taxes.

Most first movers are unsure about how their product is going to be used and spend a lot of time & energy in promoting the technology. The pioneers are sometimes focused on so many use-cases and markets that their vision is clouded. The incumbent free rides on the market research and buyer education and is better poised to make a focused brand targeting the most compelling

The first mover often is saddled with high failure rate due to pricing, communication/promotions, operational jitters, poor commercialization or plain vanilla economic viability. Sometimes they don’t have enough resources to operate long enough to see success. Other times they are not able to scale up fast enough to fully capitalize on the demand. The incumbent not only faces lesser risks of product acceptance, but knows better what will work and where to invest to get quick returns.

It is easy to get an entrepreneur excited by giving him a story about being pioneers and giving them a unique proposition that is 5-10 years ahead of its time. However most people don’t realize that “Success is not achieved through cutting edge technology but by solving real life problems”. Rarely is the market two small for 2 players to thrive and second mover is not a bad strategy for an agile firm.

Careers & true Company profile

If you want an honest insight about one of the company that you plan to do business with, go to their recruitment portal. Unlike the marketing pitch the recruitment section of the company will tell you which are the major offices, which office does which activity, what are the focus areas of the company (areas where they have a large workforce, areas they are growing in).

Marketing pitches on the other hand will only promise you the moon, they will always project that the company has a large focus in the city and the business vertical that you are interested in. It will project the company to be Superman who can do anything (even though the reality says otherwise)

Job portals are a lot more focused, the kind & number of opening gives solid insights on the business activity that the company does. The location tells you what activity done where, which are sales office and which are delivery centers. The qualifications (and salary offered) give an insight of the quality of labor the company is targeting, experience levels. It will tell you what are the core areas where the company has in-house expertise and what are just pitching points. Some of these insights are difficult to gauge even after a site visit.

Why do people & project what they are not? Why is there a constant need to lie and cook up fables about slaying dragons.

Niche is for losers

Most management theories esp. the “Blue Ocean Strategy” emphasize on staying away from cut-throat competition. The resulting blood-bath only results in depleted margins, huge investments, marketing and management focus with little to show for. Everybody, but the last man standing gets wiped out or quits after cutting their losses. Indian retail (organized brick & mortar as well as e-commerce) are the vivid examples.

Naturally the focus is on Blue Ocean strategy. Carve out a zone for one-self, grow and develop it and reap economic profit (due to little competition, marketing or price wars). Hence I always thought being a niche player is not a bad thing. Niche companies have found their sweet spot and devote all their energy & focus in exploiting the opportunity fully.
Hence today when I looked at the Gartner’s magic quadrant, I was shocked. They rate companies on 2 axis:
1. Completeness of vision
2. Ability to execute
Based on this ranking they classify companies:
1. Leaders: High on both parameters
2. Visionaries: High on completeness of vision
3. Challengers: High on ability to execute
4. Niche: Low on both fronts

Gartner magic quadrant

Magic Quadrant for IT Services for Communications Service Providers

Although this looks very similar to BCG Matrix (axis: growth rate & market share and the quadrants being dogs, stars, cows and question mark) Clearly Niche seemed like a euphemism of dogs (low on both fronts).
Still skeptical, I researched the company profile & annual reports. Naturally almost all companies described them as leader and visionaries. Some start-ups did position themselves as challengers which are disrupting the existing status quo. The only time the company used the word niche was to describe their past. It was only used the highlight the hopeless situation & challenges faced by the new leadership team in its initial days. The 2 situations common in all the description are:
1. The product had limited application & market.
2. Also the total market pie was shrinking (if it is growing then the company would classify itself as a leader in XXX product for XXX industry in XXX market…. Rather than saying that they are a niche player)
As described in Freaknonics,  sometimes people seemingly pleasant looking words to describe the hopelessness of the situation.

How to Handle Difficult People – by Deepak Chopra

The path to success can be derailed by clashes with difficult people, and even if the clash isn’t disastrous, it can make your life very unpleasant. Everyone has a store of coping mechanisms that we resort to when we find ourselves in stressful situations. Difficult people force us to fall back on our coping mechanisms. Some of us placate, others confront. Some balk, others become aggressive. When these first-response tactics don’t work, when a difficult person makes you tear your hair out in total frustration, you have to dig deeper into yourself and find a better strategy.

First of all, not every difficult person is the same. There are tyrants, curmudgeons, aggressors, the viciously competitive, and control freaks. A psychologist can outline how each beast might be tamed, but on a day-to-day basis, one can adopt a general approach that’s the same. It’s quite a simple strategy, actually, based on asking three questions.

1. Can I change the situation?

2. Do I have to put up with it instead?

3. Should I just walk away?

When you ask these questions in a rational frame of mind, you will be able to formulate a workable approach that is consistent and effective. Most people are prisoners of inconsistency. Think about the most difficult person in your life and how you have reacted to them over time. You’ll probably find that you sometimes put up with them, sometimes try to get them to change, and other times simply want to stay away. In other words, three tactics have merged in a messy way. You wind up sending mixed messages, and that’s never effective.

So let’s consider each of the three questions in turn.

1. Can I change the situation?

Not all difficult people are beyond change, even though they are stubborn and stuck in their behavior. But there’s a cardinal rule here that can’t be ignored. No one changes unless he wants to. Difficult people rarely want to. If you have a close rapport with the person, you might find a moment when you can sit down and have a candid discussion about the things that frustrate you. But be prepared with an exit strategy, because if your difficult person winds up resenting you for poking your nose where it doesn’t belong, trying to effect change can seriously backfire.

Your best chance of creating change occurs if the following things are present.

– You have a personal connection with the person.

– You have earned his respect.

– You’ve discreetly tested the waters and found her a bit open to change.

– You’ve received signals that he wants to change.

– You aren’t afraid or intimidated.

– The two of you are fairly equal in power. If the difficult person is in a dominant position, such as being your boss, your status is too imbalanced.

A final caveat. Difficult people aren’t going to change just to make you feel better. The worst chance of getting someone else to change occurs when you’re so angry, frustrated, and fed up that you lose your composure and demand change.

2. Do I have to put up with it instead?

When you can’t change a situation, only two options remain, either put up with it or walk away. Most of us aren’t very effective in getting someone else to change, so we adapt in various ways. We are experts at putting up with things. Adaptation isn’t bad per se; social life depends upon getting along with one another. It’s a reasonable assumption that if you have difficult people in your life right now – and who doesn’t? – you’ve learned to adapt. The real question is whether you are coping in a healthy or unhealthy way.

Look at the following lists and honestly ask yourself how well you are putting up with your difficult person.

Unhealthy:

– I keep quiet and let them have their way. It’s not worth fighting over.

– I complain behind their backs.

– I shut down emotionally.

– I don’t say what I really mean half the time, for fear of getting into trouble or losing control.

– I subtly signal my disapproval.

– I engage in endless arguments that no one wins.

– I have symptoms of stress (headache, knots in the stomach, insomnia, depression, and anxiety) but have decided to grin and bear it.

– I know i want to get out of this situation, but I keep convincing myself that I have to stick it out.

– I indulge in fantasies of revenge.

Healthy –

– I assess what works best for me and avoid what doesn’t.

– I approach the difficult person as rationally as possible.

– I don’t get into emotional drama with them.

– I make sure I am respected by them. I keep my dignity.

– I can see the insecurity that lies beneath the surface of their bad behavior.

– I don’t dwell on their behavior. I don’t complain behind their backs or lose sleep.

– I keep away from anyone who can’t handle the situation, the perpetual complainers, gossips, and connivers.

– My interaction with the difficult person has no hidden agenda, like revenge. We are here for mutual benefit, not psychodrama.

– I know I can walk away whenever I have to, so I don’t feel trapped.

– I can laugh behind this person’s back. I’m not intimidated or afraid.

– I feel genuine respect and admiration for what’s good in this person.

If your approach contains too many unhealthy ingredients, you shouldn’t stick around. You’re just rationalizing a hopeless situation. Your relationship with your difficult person isn’t productive for either of you.

3. Should I just walk away?

Difficult people generally wind up alone, embattled, and bitter. They create too much stress, and one by one, everyone in their lives walks away. But it can take an agonizingly long time to make this decision. The problem is attachment. The abused wife who can’t leave her violent husband, the worker who is afraid he can’t find another job, the underling who serves as a doormat for his boss – in almost every instance their reason for staying is emotional. Life isn’t meant to be clinically rational. Emotions are a rich part of our lives, and it’s mature to take the bitter with the sweet – up to a point.

Too many people stick around when they shouldn’t. The main exceptions are competitive types, who can’t bear to be dominated or made to look bad. They instinctively run away from situations that hurt their self-image. The other main personality types – dependent and controlling – will put up with a bad situation for a long time, far beyond what’s healthy. The point, in practical terms, is that you can’t wait until you’ve resolved all your issues with a difficult spouse, boss, boyfriend, buddy, colleague, or employee. Vacillation doesn’t make you a better or nicer person. You are treading water, hoping that the dreaded day will never come when you have to sever ties. The thought of separation causes you anxiety.

But as anxious as you feel, sometimes a rupture is the healthiest thing you can do. That’s the case if you have honestly confronted questions 1 and 2. If you know the difficult person isn’t going to change, and if you’ve examined the unhealthy and healthy choices involved in putting up with them, you have a good foundation for making the right choice: Do I stay or do I walk? I’m not promising that your decision will feel nice. It probably won’t. But it will be the right decision, the kind you will be able to look back on with a sigh of relief and recognition that moving on was healthy and productive.

https://www.linkedin.com/today/post/article/20130822022815-75054000-how-to-handle-difficult-people?_mSplash=1

 

Power of Branding: Price tag as a product feature

The price you pay sometimes is the biggest feature of the product or service. There are so many instances where higher the price translates into higher customer satisfaction.
A INR 1,00,000/- watch has the same accuracy & features as a 200/- watch. A 1,000/- mobile phone often has the better cell tower reception & battery life than a 30,000/- smart phone. A foreign vacation is no better than a domestic travel/road drive. Same is true with bags, shoes, cars and so many products… yet we buy them.
Neo-rich do an ostentatious display of wealth through solid gold jewelry & flashy/gaudy accessories. ‘Khandani Raseesh” (who inherited wealth) might not be flashing their price tags, but they let their brand, logos and club membership to speak for them.
Human beings have a herd mentality and always want to be part of that inner-circle. They would go to any lengths to showcase that they belong to that most coveted exclusive club. In today’s capitalistic society that is often determined by the price tag. More the price of the product, the more exclusive it becomes. Sometimes the price-tag & exclusivity supersedes everything else. I guess no wonder any company (including the pharmaceuticals) have a higher branding budget than R&D.
You might like my older post here.

 

The brand called ME!

Some unscrupulous salesperson would promise anything to the client to close the deal. They sometimes make promises and give assurances that are unfulfilled, but who cares. In most companies there is a complete disconnect between the guys who markets/promotes the product, sell it, deliver the service, maintain it and take the feedback. Everybody is given a target which is impossible to meet and the guys who live on commission often live paycheck to paycheck.

However do all this justify the shortcuts people take to close the deal? Giving false assurances to business associates is often the preferred Band-Aid used to postpone the inevitable anger and escalations, but does it solve anything?

What I have often seen is that it only tarnishes your credibility and the value of your words and assessments. The world is increasingly becoming connected and everything is being archived & recorded. Your honesty, promptness and straight forward lying of facts, no matter how bad, will only add to your credibility. After all a timely warning will give your associates ample time to take alternative measures and do damage control… rather for waiting for a miracle.

You might change your company in a couple of years, but the world will always remember your face. Your deceit today might not save the situation, but will surely damage your reputation.

 

White label vs. private labels

These 2 buzz words have being doing rounds lately in the media and surprisingly very few know exactly what they mean. So I am summarizing and demystifying these terms for my lazy friends who don’t have time to read the wiki pages for them.

White Label: As the name suggests, these are unbranded products designed and developed by a manufacturer who does not have a retail connection. As the name hints, the brand/label portion is left empty in for the purchaser who would then retail it as part of its own brand offering. Most Chinese goods are white-labels because they are sold under a more popular European/American brand/logo. Technically speaking, white goods manufacturer are not subcontractors but guys who conceive, design and manufacture the goods. However this distinction is fading and many sub-contractors (those who manufacture based on client’s design & requirements) also project themselves are white label manufacturer.

Private Labels: These are retail chain’s own brands/products which are neither widely advertised nor are retailed elsewhere. The store sells them usually at a discount (to keep customers happy), while it has extra margins because it bypasses the branding and marketing costs incurred by P&G, Unilevers, Pepsi and Coke of the world. The retail chain typically bulk orders them (often overseas) from a white-goods manufacturer, put on its own logo and sells it at its retail outlet (often showing price comparisons against the popular brands)

Remember, although all private labels almost exclusively use white-label goods, not all white label goods are sold as private labels.