Niche Down

by Christopher Lochhead

  When you have that type of conversation, you’ve just changed the playing field.

  Context is everything.

  Ask yourself, are we having the right conversation?

  When the conversation was around this question, “Can we wash our hands with water?” There was an answer. Soap.

  Or “bar soap” after the designers of “liquid soap” pulled a niche down. And liquid soap became a new category when the question changed to “Can we wash our hands with water in a way that is not disgusting and wasteful?”

  Ta-da! A new category is designed.

  As GOJO has proven, you can reposition and destroy your competition by exposing a problem your prospect couldn’t articulate or maybe even identify.

  From there, you show your customer — whether that customer is a consumer or another business professional — how you’re going to solve her or his problem.

  Niche down.

  Every market category works the way it does now because it got designed that way, either accidentally or on purpose.

  No one knew why they needed an iPhone until the late great Steve Jobs showed them. But once he and Apple conditioned the market to see the problem that its “smartphone” solved, the market clamored to get their hands on the solution.

  He redesigned the problem.

  And that was the beginning of the end40 for a very worthy mobile-technology company that hails from the Great White North (aka Canada), the former Research in Motion (aka RIM).

  Its BlackBerry, while it was a very worthy gadget and beloved by the tech sales set, faded into has-been status because Apple changed the idea of how average humans should interact with their mobile-communications device. Instead of pecking away with your thumbs at a teeny, tiny keyboard, why not just touch the screen to navigate through messages and applications? So much simpler and more intuitive!

  The BlackBerry primarily solved a mobile-email problem. Jobs created the smartphone category by designing a piece of technology that addressed a different problem — how to live a mobile life. That required computing, communications, millions of niche apps, and a glass, touch-screen experience. All in one device, not several different gadgets.

  The BlackBerry went from looking awesome to looking like a Ford Edsel.

  Apple didn’t compete in a traditional way. It did not get into a feature or price war like most tech companies do. It redesigned the definition of a mobile phone. It had a different point of view.

  RIM’s big mistake was assuming that Apple’s “consumer” product couldn’t possibly matter to its core customer base, businesses and government agencies. To be fair, the BlackBerry wasn’t knocked out immediately, it staggered around the ring for almost a decade, mainly because of its rock-solid security software.

  But what RIM’s executive team failed to intuit was that many people would decide they didn’t want to bother using two different mobile phones — one for their “professional” existence and one for their “personal” life. Back in 2007, when the original iPhone arrived, the line was already blurring for many people, and the iPhone made the boundaries even murkier.

  Since the legendary “1984” advertisement that introduced the original Macintosh computer, Apple has set the standard for advertising technology, and its early campaign for the original iPhone continued that tradition.

  The “Hello” teaser spent a few moments establishing the telephone as an indispensable and ownership-worthy device, by showing celebrities like Lucille Ball, Marilyn Monroe and Sarah Jessica Parker greeting callers, and then cutting to a ringing iPhone.

  After the official launch, Apple didn’t waste time on spots espousing the device’s groundbreaking specs, even though there were scads of them. Rather, it leaned on videos that showcased the gadget’s usefulness for the thwarting the ordinary-yet-crucial challenges of everyday living, like looking up the phone number for a nearby seafood take-out restaurant or for helping ordinary people lighten the load in their briefcases and knapsacks like this one from an early testimonial series.

  It took less than one decade for Apple to sell more than 1 billion41 iPhones. All because the company conditioned people to equate this brand-new category — a touch-enabled smartphone that also doubled as a media player and an Internet-access tool — with the iPhone.

  Conditioning the market is the opposite of going to market.

  Going to market means playing by someone else’s rules on someone else’s playing field. The game is automatically rigged — anyone aside from the category queen is going to fail until someone steps in to design a new category.

  Conditioning the market is the process of teaching the market to think about a problem and a solution in a very particular way. Your way.

  How To Grab Attention (Aka, Make Lightning Strike!)

  OK, dear readers, we can hear your audible and skeptical grumbling, “But Apple has millions of dollars to spend on advertising, there’s no way that a small or smallish entrepreneur can make that sort of impact.”

  Tell that to Justin Esch and Dave Lefkow, the founders of J&D’s Foods, who double-handedly designed the “bacon-salt” seasoning category. And bacon-flavored mayonnaise. And bacon-tasting lip balm. (No, we’re not kidding about that last example.)

  Did we mention that all of these products are vegetarian and kosher-certified? Not qualities you’d normally associate with bacon. But people liked their idea: The duo’s initial batch of 5,000 Bacon Salt jars sold out in five days.

  Their venture started out as somewhat of a goof — backed with $5,000 from a prize-winning submission on “America’s Funniest Home Videos” and grounded in the notion that bacon makes just about everything taste better. (An idea hatched during a Jewish wedding.)

  And it’s only natural that many of the pair’s early marketing stunts — like the Bacon Suit they wore to give away early samples at college football games — started as jokes.

  The aforementioned bacon lip balm was actually one of the products created for J&D’s annual April Fool’s Day campaign, but the company ended up selling hundreds of thousands of the tubes. The company’s first April-Fool’s-Day promotion was for a “forthcoming” bacon-flavored personal lubricant dubbed “Bacon Lube” — the team encouraged people to sign up as beta testers at this email address: keepitsizzlin@baconsalt.com.

  So many people signed up for the waiting list (more than 5,000 people were pretty hot over the idea), that the company actually had to figure out a way of making the product, Lefkow told the Huffington Post42. (By the way, don’t try the email, it doesn’t work anymore!)

  “Despite being hilarious, it was a business move,” Dave said during that interview. “We launched the lube with one of our mainstream, food products, Bacon Croutons, and that’s one of the best things we could do for the brand.

  Launching Bacon Croutons isn’t exactly newsworthy, but introducing Bacon Lube at the same time means getting on 500 radio stations, on newscasts and in papers, and we’re getting exposure as J&D’s, the makers of Bacon Lube, but also makers of Bacon Salt, Bacon Croutons and Bacon Ranch.”

  The founders hired interns to help brainstorm its novelty ideas — which eventually included a bacon-lined coffin, moustache wax and condoms. And the April-Fool’s-Day stunt became an annual tradition while Justin and Dave still controlled the company. (They’ve since sold it to an organization that specializes in representing niche foods.)

  This sort of campaign is a classic example of what in Play Bigger the boys call a “lightning strike” — a concentrated bolt of energy intended to shock the market and grab attention fast.

  On a company level, a lightning strike is a concentrated set of integrated sales and marketing actions designed to move the market from where it is now to where you want it to be, with the aim of establishing you and your organization as the category designer.

  A lightning strike includes a very focused set of activities
delivered in a very short period of time, designed to produce the biggest impact.

  Figuring out when to strike requires constant vigilance. John and Mark, the son-and-father sock-selling duo we introduced in Chapter 3, have proven themselves masters at seizing the moment.

  When John read an article in 2017 about President Bill Clinton gifting his predecessor President George H.W. Bush with a pair of wacky socks, he sent a selection of the company’s inventory to the former President’s office. After all, this was the President who signed the American with Disabilities Act into law.

  In 2018, President Bush’s staff reached out, looking for some more. The President wore one of the pairs in that batch, the Down Syndrome Super Hero design, on World Down Syndrome day and tweeted this comment along with a photo: “Yesterday, I was inspired by my friend John Cronin to wear these beauties from @JohnsCrazySocks marking World Down Syndrome Day. A great sock supporting a wonderful cause.”

  President Bush also wore a book-themed pair of John’s socks to the late First Lady, Barbara Bush’s, funeral as a tribute to her commitment to family literacy. And in late April 2018, in the days after she was laid to rest, that design was rebranded as “Library Socks for Literacy,” with 100 percent of the profits going to the Barbara Bush Literacy Foundation.

  Executing a lightning strike often means setting a huge, publicly-declared goal. And it means seizing the moment, a moment that’s right for your specific niche.

  When Pleasant Rowland launched American Girl, she naturally picked the lucrative, holiday-gift season to make her impact. Rather than trying to find space on crowded retail shelves, she opted for mail order. Sure, that limited her potential orders, but it also created the perfect storm for any toy company: a sold-out season with every doll claimed by a family.

  It was only after the category was established, that American Girl started establishing itself with retail partners and the backstories of each doll expanded the potential-partner options. Does this belong in a bookstore or a toy store? Hey, why not both?

  Once a date for a lightning strike is set, you will have to mobilize thoughtfully and deliberately to pull it off.

  Deadlines make shit happen.

  Bigly.

  Here’s another example of a lightning strike that set up one of Christopher’s friends for a legendary career. Mike Maples, Jr. moved to Silicon Valley from Austin, Texas, with the goal of starting a successful venture-capital fund.

  He immediately started developing his ecosystem in the venture world, because in that world — like most worlds — you can’t operate on your own. Other people make us successful.

  To power up those connections more quickly, Mike planned a rather opportunistic lightning strike: He invited everybody he had built relationships with, including his new ecosystem in Silicon Valley, to his spectacular 40th birthday party.

  Mike was front and center, playing host and talking with guests about the deals he was doing. That got the dominos falling even faster for his company, Floodgate, which specializes in early-stage funding for entrepreneurs trying to establish new categories — often long before the rest of the world believes in them. It calls these sorts of entrepreneurs “prime movers” with the ability to create “massive outcomes from nothing.”

  Among its many investments: Twitter, wireless-speakers company Sonos and ridesharing giant Lyft.

  Influence The Influencers

  Every bit of success we enjoy comes from other people.

  Customers say, “Yes,” and give us money in exchange for services. Employers say, “Yes,” and hire us. Other people in our industry think we’re awesome and send us other customers, prospects, partners or employees.

  It’s a virtuous cycle.

  And that’s why a great category inspires a healthy ecosystem of influencers — maybe we should call them loyal subjects — around its queen or king. That ecosystem might include customers, suppliers, developers, partners and both real and virtual communities of interest.

  Many small business owners join networking groups, lead-sharing and/or mastermind groups. When people do this, they are growing their ecosystem.

  Take the legendary “Surf Shop” founded in San Francisco by Jack O’Neill back in 1952.

  More than just a place to buy surfboards, the shop there — and later farther south in Santa Cruz, California, where it moved within 10 years — became a place where the local surfing community would hang out to trade stories and tips.

  It would also become the real-world proving ground for O’Neill’s new category of cold-water swim attire, neoprene wetsuits.

  Jack O’Neill felt so strongly about the importance of this gathering place for building credibility that he trademarked the term “surf shop” in 1962 (although he never hassled others for stealing the term). Jack was an intuitive category designer.

  The wetsuit slowly transcended the original sport, making big waves in recreational diving. (Full disclosure: Heather is an O’Neill customer who is proud to say she still fits into the 3-millimeter full-skin she bought in 2000 when she took up diving. And Christopher’s first wetsuit was an O’Neill; he wears their products with pride.)

  “Jack decided he had to become a stand-up member of the community,” his son Pat told The San Francisco Chronicle for a profile43 about the late entrepreneur published in May 2012. “He’s always got along really well with people from all walks of life. As a result, he became friends with people from all over the social and political spectrum. He had friends that were wealthy and powerful in Santa Cruz and people who lived in cars.”

  More than 50 years later, the operation is still embedded deeply into the community — other local businesses orchestrate their own promotions to coincide with the store’s annual Labor Day parking-lot sale. It’s still innovating with the future in mind. The company in 2016 started a brilliant loyalty program for surf-going moms and dads who outfit their kids with O’Neill togs. As junior grows out of his or her wetsuit, they can be traded for a credit of up to half-off the purchase of a new one. (This isn’t a one-time thing, it can be repeated year after year, until your mini-you grows into the adult size.) When Jack O’Neill passed away at the age of 92, in summer 2017, thousands of surfers paddled out to sea in his honor. Check out this “aw”-inspiring footage44 of the event uploaded by the company. If you look closely, you might see Christopher in the water!

  The key is to build an ecosystem purposefully like Jack O’Neill did, not by default.

  Strategically surround yourself with people you trust.

  Treat them better than you treat yourself.

  Form bonds that go beyond the walls of your company.

  Treat your ecosystem like customers. Maybe even more importantly than customers.

  Deliver something of value. When you need help, your ecosystem will be there to help you and vice versa.

  Rich Novak, a pioneering entrepreneur and avid surfer from Jack O’Neill’s home turf (or shall we say surf?) consciously and proactively organized the emerging skateboarding category45. Back when Rich started shredding, the main equipment used by enthusiasts was roller skates coupled with two by fours. Rich helped the category “tip” by mobilizing component suppliers — you can thank him for big breakthroughs in wheel technology during the 1970s — and convincing his competitors to collaborate on standards.

  Rich ended up starting multiple companies within the category’s supply chain along the way. When you see problems in ways others don’t, why not fix them?

  For example, when the major skateboard magazine that Rich relied on to advertise his various skateboard brands (Santa Cruz, Creature and Independent Truck Co.) pivoted away from its original editorial mission, he helped start another publication in 1981 to fill that gap. As of this writing, Thrasher magazine is still the “skater’s bible” and the Thrasher brand can be seen on t-shirts, backpacks, sweatshirts and more around the world.

&
nbsp; The multi-million-dollar company cofounded by Rich in 1973, NHS Fun Factory, is the oldest company in the world dedicated to selling skateboards. All because Rich never stopped thinking about the ecosystem.

  “They built the industry before they built their business,” the company’s current CEO Rob Denike told The Santa Cruz Sentinel46 in October 2013. (Rob was an early product tester who worked his way up in the ranks.) “It was just raw entrepreneurial spirit. They took it from a fad to an actual business and, as a group, decided they were going to focus on growing the industry. If they were good businessmen, they would get a piece of that pie.”

  A similar philosophy was behind the collaboration we mentioned earlier between the Girls Scouts of the USA and GoldieBlox, which is laser-focused on encouraging girls to learn more about science, technology, engineering and mathematics (STEM) at a far earlier age. It’s part of a larger series of STEM-related badges47 adopted by the organization in summer 2017, encouraging girls to code software, design robots and race cars, and collect environmental data.

  GoldieBlox partnered with the organization to create mechanical-engineering kits to help with six of the badges. The relationship was personally championed and cultivated by founder Debbie Sterling, herself a former Girl Scout.

  “The goal is to get girls inventing and learning what it means to be an engineer,” Debbie told Forbes.48 “By earning these badges, we are removing the intimidating factor and building girls’ confidence with STEM.”

  And it reinforces GoldiBlox’s core point of view, which positions the company as a STEM missionary for girls.

  TerraCycle, the waste management innovator we introduced in Chapter 2, offers another illustration of how to build influence in a mutually beneficial way. And this strategy was not adopted by accident.

  “You should only do what is unique to you. Logistics is definitely not unique to us,” Szaky told Heather in their interview for this book. “We are allergic to capital expenditures. It is the death of innovation.”