I’m sitting on a couch in Italy, and Brad Feld is lying on an adjacent and perpendicular couch. We just had a thrilling conversation about what you should do to beat your closest competitor when you’re number one in a market. This (d)evolved into what I thought was a much more interesting conversation about what what to do when you’re #2 in a market but want to be #1.
The premise here is that if you can’t become #1 or #2 in your market, then think about getting out of the market or find a different market position. #1 wins big, #2 generally wins or does OK and everybody else loses.
I took some quick notes.
Things that work when you’re #2
1. Make a big deal about stupid things to distract #1 to make #1 spend time on them.
2. Go hard after areas that #1 isn’t (yet) dominant in. Make yourself very relevant in areas where #1 isn’t yet playing.
3. Increase transparency in areas where you know #1 is weak.
4. Develop a reputation for pleasing customers more than #1.
5. Don’t just follow #1, provide real innovation/market leadership and behave as if you were already #1.
6. ignore #3, #4, and #5, et al – don’t take their bait
Things that work when you’re #1
1. Don’t react to the ploys of #2. Completely ignore them and don’t react to them. Just don’t take the bait.
2. Give #2 your worst customers, but make them chase the price down to zero for those customers. Make sure they take your worst customers for no money.
Have these things worked for you? What else has worked or not worked in these situations?
Now the girls have joined us and we are talking about underarm hair. I am not taking notes.
