Aside

Swiss Army Knife of XYZ

Because of a twitter exchange, a CEO of a company sent me their website link and asked me to check it out. After a minute of arriving, I left. I couldn’t tell who it was for, I couldn’t even tell what it was. Rather than ignoring this email, I wrote back with some advice to the CEO — make it easy to know who you serve and why it matters. 

It’s the easiest advice to give of course — know who you will serve and why you stand out. But each entrepreneur I know tries to skip this point. So let me just share that “we serve everyone who could possibly use xyz” is not a valid answer. 

 

And, yet, you might ask… does it really matter? I mean, what if the product really does have scale across many segments and it’s agnostic to size of company? What if it is really the swiss-army knife an solves tons of problems? Then, can the company avoid segmentation or individual positioning? Really, isn’t it better to position towards a big space than a small space? 
Well, that depends. 
On whether you want to be seen, heard, understood for what you are. By anyone.  
You see the more “swiss army knife” you are, the more your customer can question, “is it really for me?”, and walk away to find something more perfectly tailored for them. Segmentation and go-to-market is all about clarity. If you, the entrepreneur, are spreading resources/time/attention into places that aren’t perfect, you are doing the equivalent of throwing spagetti against the wall and hoping things (something, oh, just something) sticks. 
What your new company needs, and your customers want is for you to be clear so you can aim well, and hit the goal by serving them perfectly. When your messaging seems all over the map, it means you really don’t know. (And you are actually asking or expecting customers to know for you — in other words, you are being demanding early on in a relationship where you have given nothing.) 

Yes, segmentation matters. The difference of clarity means you can say no when you need to and yes when you need to… because you know who you are. Focus is why segmentation matters. 

And segmentation matters because you are more precise. And if you don’t know exactly who you are serving, doesn’t that also mean you don’t know their real pain. More than likely, you are probably standing too far away to know and how can that prove compelling?

(And just remember, the swiss army knife was produced to serve the military who needed a pocket knife and some other tools with them at all times; they knew who they served and why.)

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2 Responses:

  1. CiviGuard. October 6, 2010 at 4:47 am  |  

    Hmm, this one hits home :) Here’s the paradox:You are start-up. You want to change the world. You are told to think huge because if you serve a market too small, your chances of raising funding from influential investors evaporates. And being from Singularity University, we are trusted with positively impacting a billion people in 10 years. Minor responsibility.When we focused on Government specifically as a market – it didn’t matter how focused we were… no investor wanted to deal with the long sales cycles and politics that come with that space. When we focused on the everyday people being our market, we opened ourselves up to huge market but then were faced with a chicken-egg scenario where people would only use a platform if they could derive daily or frequent value from it. No one downloads apps that get activated once in a blue moon during emergencies. So then we pivoted again and now focus on organizations large and small – irrespective of traditional segmentation boundaries. Why? Because operational resiliency has nothing to do with the vertical or horizontal position of the entity. It is a universal need that simply hasn’t been accessible easily enough until we came along. This is no different from Yammer. The “private” Twitter service makes no effort to “segment” itself for each major corporate tier. You know why? Because friction-free communications inside the enterprise are essential for 10 person companies and 80,000 person companies. It would be pretty stupid of them to sit around and create segmentation strategies and product road maps for each vertical (Healthcare/Financial etc.) and then even more segmentation (Government vs. Non-profit vs. F500 vs. F2000 vs. SMB). Yammer would probably have never been funded if it shared that vision – the capital efficiency they have today would have been impossible to sustain without a swiss-army knife approach. So no, in our case, I can say with conviction that a lot of thought has been put into the strategic shift towards a “one size fits most” approach. The decision results from an intricate understanding of our competitive landscape, our customer’s needs, our mission and investor preferences. That being said, I will concede that we need to improve our messaging and that our current stance is diluted due to the recent transition from direct-to-consumer to B2B. And we’ll change that because change is one thing we aren’t afraid of.

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  2. Nilofer Merchant. October 6, 2010 at 3:08 pm  |  

    Interesting you use Yammer as the comparison point. Yammer came at a time when Twitter was already established (and getting a lot of hype on shows like Oprah, etc) so the value of “microblogging” was known and they positioned themselves against that “private twitter”. That was solid because it was really clear what they did. And that is the point of segmentation: clarity. Do you know who you serve (and can therefore focus) and does the customer know whether the product is right for them? If you feel you have answered the market positioning so everyone can say “aaah, so” to your positioning, that’s awesomeness.

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