There Are Two Types of Businesses…

I reread yesterday’s post. It seemed a bit of a suckfest. Sure it’s all true. So what do you do about it?

A couple years ago I started writing a book, working title, Punch Above Your Weight:  How To Survive & Thrive Going Toe-to-Toe Against the 800lb Gorilla In Your Space. I got a fair chunk of it done, but it needed more empirical data, it lacked a clear direction and I never found time to flesh out the case studies I had outlined. In the meantime, it ended up that I’m now writing a completely different book, for O’Reilly Media (due out June 2015), about managing domain names and DNS. 

So I’ve decided to start posting chunks of the early draft for “PAYW” here in a new category called “Punch Above Your Weight”. Maybe this will someday become another book, we’ll see. But I think it’s an area that can garner some robust discussion….

There Are Two Types Of Businesses

This has long been one of my core beliefs about business and nowhere is it more true than in the ecommerce and web business landscape.

It is that web based businesses can be roughly divided into two categories:

1) The kind that do better the dumber their customers are.

2) The kind that do better the smarter their customers are.

The Gorilla has to appeal to the lowest common denominator and strive for the widest possible market penetration, thus their level of discourse will have to be lower, and they tend to employ business tactics that work well on less sophisticated mindsets.

These include: bait-and-switch, deceptive promotions, emotional triggers, gloss, sizzle, NLP, bikinis, monkeys and then usually complimented with a lot of fine print.

Competing against the Gorilla almost necessitates “doing it differently”. This is discussed throughout, but the gist of it is to survive and thrive by not competing with Gorillas head-on or on their terms.

So if the Gorillas are selling hand-over-fist to clueless customers then you differentiate in two ways:

1) Gear your product or service toward smarter customers.

2) Educate the Gorilla’s customers so that they become smarter (admittedly, a hard sell, more on this later).

Bear in mind when we say “clueless” we mean people who do not have an intimate in-depth understanding of the subject matter with which you deal. If you are a web hosting provider, then “clueless” people could include brain surgeons, philosophy PHDs and other intensely cerebral people, who just aren’t specialized or have in-depth knowledge and experience with how “web stuff” works.

What we are saying is that the two kinds of businesses either benefit from customer ignorance or they benefit from customer savvy. We have always geared easyDNS toward the latter, and if you have an 800 lb. Gorilla to compete with in your space, you should too.

This Is Encapsulated In the Field of VRM

Since I wrote that, I discovered Vendor Relations Management (VRM). The entire field of VRM, (what Doc Searls calls “The Intention Economy”) is the definition of the smartcentric-customer space, because it deals exclusively in catering to the individual preferences and requirements of the end user, on their terms and in a way that respects their privacy and data handling preferences. In other words, you can’t get a customer much smarter than the one who knows exactly what she wants, on what terms and is willing to give you the opportunity of fulfilling it.

When I originally read The Intention Economy I became very excited, having since given a copy to every employee here and gone on to give a dozen or so copies to colleagues and associates. “Read this” I would tell them, “This is the future.” Granted, since then the spectre of global, ubiquitous, illegal government surveillance of all of us might make you think things have gone in the other direction. This is temporary. Since the Snowden revelations appeared, the discussion on Project VRM has incorporated the pillars of privacy and data sovereignty so comfortably it’s as if it was always there.

It may turn out that the total Orwellian surveillance may be the force that impels and necessitates VRM and the Intention Economy as counterbalance to this, and in fact give it the critical mass we’re still waiting for.

 

Leave a Reply

Your email address will not be published. Required fields are marked *