November 22, 2005
How Can David Beat Goliath?- Strategy #6: Set your Operating Point closer to the Funnel Singularity!
I have been trying to decide if this strategy is an independent strategy or if it is just an accumulation of prior strategies. I have not completely made up my mind, but I think the approach has strategic importance, at least for certain product markets, so I am including it in the list. I have already written a lengthy (wordy?) post on the topic titled “Extreme Funnel Economics- Aiming Toward the Economic Singularity,” so I will not recreate it here.
The basic strategy is to make everything (e.g., product, pricing, customer service) other than the sales and marketing effort so compelling to the target customers that they purchase the product without a significant sales and marketing effort (or expense). The closer you get to zero sales and marketing expense (the singularity) while still growing well, the better you have executed against this strategy. There are some caveats, so read the post if you are interested.
This strategy is perfect for the small company vs. the large company, as it hits on the large company disadvantages in all of my prior posts. Your strategy should be that no matter where the large company has placed itself, set your operating point closer to the funnel singularity!
Ultimately, the strategy is similar to my thoughts as a kid, when I figured that if I could get just a penny from everyone in the world then I would be rich. With the current networked world, this dream could be at least partially realized…
Next time: Strategy #7: Attenuate Goliath’s Strengths!