Outflank the competition

I hate competitors – they mess up my best ideas. They steal my would-be customers and rob me of my money. Unfortunately, all of my businesses seem to have competitors. My solution: I always try to find a sales or marketing approach to out-maneuver the inferior competitor. Don't get me wrong, the products have to great but I long ago realized that unless we're creating a truly "change the world" type product, the sales and marketing angles will determine our success. At Raindance, I wanted to move away from a direct sales force and try to sell web conferencing over the web (we were spending $20M a year on a sales force that was adding only $10M in new sales – this was a declining market issue more so than a people issue). Since we had little revenue from our web line of business and the sales force really wasn't selling much of our technically superior product, I figured we should take on the competition (WebEx) by attacking their direct sales model. We could isolate our business – have the sales force focus on audio conferencing since that is what they were doing anyways and sell the web conferencing stuff over the web at a much lower price point. I had a few case studies that showed this might be a good idea (namely J2 Communications). WebEx had an expensive sales force and a high priced product – if we sold over the web, we could hit them at both the revenue and expense lines. This was a gamble and a rather dramatic outflanking maneuver for the industry. We had $40M cash to make this happen; unfortunately, it never did due to circumstances beyond my control (i.e. car accident). After I left, it was deemed too bold of an attack and too risky for the company to embrace. It may have been a bad idea, but at least it was different than attacking the competitor head on.

The two business ideas I am working on now both rely on different sales and marketing approaches. The bottle idea we've decided to sell only through web channels and by invitation only. This may be stupid – but it is different and if it works, it will set a trend that I'm sure many will copy. The other idea I'm not going to share because it's not really baked. I spend most of my time now thinking of ways to attack the market differently than the incumbents – I believe the product will always be good enough and get better – everyone loves to work on the product. Sales and marketing tends to either start crappy and get worse or start pretty good and get better. I want to make sure I start right (meaning different) with these ideas – it's hard changing once you've executed your maneuver.

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