> ""...by competing against non-consumption, all they had to do was make a product that was better than nothing. And so when you have a new product, it's actually really important that the kind of customers you target, are people whose other option is nothing at all, and that way they'll be thrilled with a limited product."
A much more "standard" example is the PC industry. When Intel started selling its microprocessors, their products were much slower than the high-end mainframe processors that the likes of DEC used to manufacture.
DEC weren't interested in the PC market because the margins were too small. They didn't think there was money to be made by selling cheap low-end computers to small businesses and homes. So these customers were "non-consumers" because there was nothing on the market they could afford. Intel (and a few other manufacturers) saw an opportunity there and exploited it.
The rapid growth in the PC market helped Intel make their processors faster and they were able to do this at a higher rate than DEC. At some point in the mid-90s, Intel's processors became almost as fast as the mainframes they were competing with but were much cheaper. DEC and friends were dead in the water.
The exact same thing seems to be happening with ARM and Intel but with roles reversed now!
CRM is a good example. In the past, only big companies could afford them. These days there are cheap and free alternatives anyone can afford. If there were no cheap alternatives the only alternative is non-consumption for many small businesses.
Even my own product, JotForm, is a good example. Web developers or professional designers don't need it. They can already create forms. People like teachers, secretaries, school administrators, event organizers who use jotform would have never considered online forms if there were no tools like jotform. The other alternative is non-consumption. (paper forms, manually collecting information)
That's a very good example. Nice design btw, I like how the tool is right in their face. (how did you create that GUI form like look?)
I wonder what it would be like to market JotForm to a web developer. I find that web developers automatically think I can do this in X amount of time why should I pay? It's already a tough sale I can see.
But, focusing on non-technical people, this would be a great alternative, much better than doing it manually or hiring some guy to create an elaborate web system.
You've illustrated it well, you just created the tool someone is looking for to get the job done where non-consumption is the only other choice.
many many upvotes at this entire thread, I feel that it's rewiring how I think about the product and the target.
"I wonder what it would be like to market JotForm to a web developer."
It would be very hard. That's why we don't target them.
PayPal went after eBay users first because they did not have any good way to send money. The did not try to convince vendors who can already process credit cards to use PayPal. They went after non-consumption.
When a new kind of product comes up you see all these pockets of users who are very passionate about the product because they have no other way to replace it. It is best to go after these users. They can sustain a business and if they represent a large/growing market they can grow the business.
Great question. This is a perspective that I had when I first founded my company -- how do I convey to my customers that I'm the best solution for their problem?
What I have discovered is that it doesn't matter. There's room for lots of companies. All things equal, you want to be the best (which is my shorthand for "stand out from each other in a positive way for the customer's context"). But many customers just want to solve their problem, and don't care about solving their problem in the optimal manner.
As hackers, we're obsessed with the idea that the best solution wins. As an entrepreneur, I've discovered that second rate products with first rate sales and marketing will likely outshine a better product that has outreach as a secondary priority.
This used to upset me, because I was focused on the product. As someone trying to run a business, I'm looking at the company as a whole. That means that sales, marketing, product, support, organization, strategy, vision... they're just 1 component of the whole.
It makes the sales side easier if the product is unique or clearly the best.
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Back to the original point -- companies don't need to stand out from each other when they are the only solution a customer has heard of.
Imagine you are a sandwich shop. When you started, you could just send your marketing by BCCing people through your gmail. Now your list is 2500 people, and you need a way to send to everyone.
You just want to send your email to 2500 people. You don't want to spend a day to compare the relative merits of mailchimp versus constant contact.
Flip the perspective (mailchimp's perspective, looking at the sandwich shop owner). Mailchimp's challenge isn't to differentiate from constant contact, but to simply communicate that they exist and can solve an existing problem.
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This may be more relevant for b2b versus b2c. I confess I do not understand marketing in b2c much at all.
that's a very good answer. product is only part of the big picture.
for arguments sake, what if a user can only send to 2349 people instead of the 2500 people, would it make them turned off because it didn't do the job completely 100%? is the job "2500 emails and no less"? I wonder if this is an optimization vs a fundamental necessity for the user.
would pricing scheme matter to a non-consumption individual? A) pay as you go B) pay monthly for 10,000 emails a month?
I guess I would answer by saying, it depends, and possibly.
If 1 user needed 2501 emails and your plan only offered 2500, then chances are they would be at least a little turned off.
Pricing is really important. If a 0-3000 person list at MailChimp was $20 per month, but Constant Contact tier required (2000-10000) $50 per month, the user could say something like "MailChimp solves my problem for $20, CC is $50. I can't tell the difference so I'll go with the cheaper one."
Again, though -- I doubt there is much focus on targeting competitors' users, but are competing against the user not knowing of their existence.
MailChimp's free tier allows up to 2k list members. They know most people with lists that small won't pay for a solution. As their list grows, MailChimp can ride their success into a paid tier.
there was the example of small steel mills producing sub par product on the cheap and they slowly moved upmarket destroying the incumbents. So the idea for straight disruption if for you to find an area in the market that is not served by incumbents and use that as a stepping stone to move into the bigger playing field.
http://www.youtube.com/watch?v=RQSG_d0mmf0
> ""...by competing against non-consumption, all they had to do was make a product that was better than nothing. And so when you have a new product, it's actually really important that the kind of customers you target, are people whose other option is nothing at all, and that way they'll be thrilled with a limited product."