Once you establish a beachhead-a niche you can call your own-you expand from there. It's not complicated: You simply want to leverage some sort of unique capability, innovative positioning, or both to target a distinct market segment with specific customer attributes. Product positioning and market segmentation are perhaps the most powerful tools for coming up with a differentiated value proposition that can set your business apart from hordes of competitors. In his book, Marketing High Technology, Bill Davidow says, 'Segmentation lets Davids slay Goliaths.' That's exactly what happened with WhatsApp. They thought others would want that, too. Its founders wanted a simple messaging app that didn't store messages, collect user data, or bombard users with ads, games, and gimmicks.

The answer is part focus group of one, part market segmentation, and part development. Often it's more about positioning: how you define and segment the market.įor example, how did WhatsApp, a four-year-old company with one app, 55 employees, and no revenue to speak of garner a half-billion highly engaged users and end up being acquired by Facebook for $19 billion? After all, the market is flooded with thousands of apps, including dozens of messaging apps, some from the likes of Google and Apple. But differentiation isn't just about focusing on what you're best at. Principle 3: Differentiate or die.Īs a business owner, it's a necessity to have a differentiated value proposition. In innovative companies, they usually are. But once markets begin to mature and the competition heats up, product development and marketing need to be joined at the hip. When industries are brand-new, if you build it, customers might come. Marketing thrives on reusing ideas in new ways, and companies with great marketing thrive as a result. But great marketers tend to be innovators who turn ideas into products people want and need.

They come up with wild concepts nobody's ever thought of. You can search far and wide for the first movers in those markets, but you're not likely to find them. Personal music players, smartphones, and tablets had all been around for years when Apple entered those markets with the iPod, iPhone, and iPad. That's because technology is so complex that it usually takes several iterations for the right combination of functions, features, ease of use, and price to emerge before the market takes off. Innovation isn't necessarily coming up with a novel idea - it's coming up with a product people can use.īesides, first to market is rarely an advantage. While neither Steve Jobs nor Apple invented speech recognition technology (aka Suri), since they're the ones that incorporated it into products millions of people buy and use on a daily basis, that makes them innovators. Principle 2: Innovators turn ideas into products people can use. Business is all about how effectively you use and control those variables. The equation that determines the success of your products and your company has many variables. Those near the bottom will soon be goners. Those near the top enjoy higher margins, pricing power, and more money for employees, perks, and future development.

While markets tend to grow and shrink over time, at any point in time, markets are static, and so is market share. Principle 1: In competitive markets, it's winner take all. That's why the four principles I'm about to put forth are important. That's why it mystifies so many, and yet it's absolutely critical to business success. While selling is relatively straightforward and intuitive, marketing is not. If marketing is critical to the success of any business - and believe me, it is - how do we reconcile that with the reality that few business leaders actually understand marketing and give it the focus it deserves? In this edited excerpt, Tobak explains four of his marketing principles that will help make your company a success. He provides unique insights from an insider perspective to help you make better-informed business and leadership decisions. In Real Leaders Don't Follow, author Steve Tobak explains how real entrepreneurs can start, build, and run successful companies in highly competitive global markets.

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