One of the seminal business essays is the Marketing Myopia. It was written way back in 1960 by marketing legend Theodore Levitt in the Harvard Business Review. I was recently re-reading it and it reminded me a lot of what we are seeing in the market now as startups disrupt the powerful industry stalwarts. The question the article proposes companies should ask themselves frequently is this:
What business are we really in?
A big clue is that we are never in the business of the ‘thing or service’ we make or sell, but the utility it provides, or problem it solves.
The famous example sighted in the article was the railroad industry. They didn’t stop growing because the need for moving people and freight declined, but because it got done with other methods: automobiles, trucks, planes and even phones. The need was constant, but the method of problem solving changed. More personal, more cost effective and more on demand. If you’re thinking history repeats itself just now, you’d be right. It seems the music industry, old media, photography, telephony and certain modes of transport have all suffered from the Marketing Myopia.
These examples are easy to spot. But what about some of the more obtuse examples like that of banking? Is their business providing secure deposits, loans and credit cards, or is it really facilitating commerce? I’d say it is the latter. Yet, not one bank in Australia has embraced either crowd funding or crypto currency. In a world of rapid change, an industrial era, ‘wait and see’ strategy might make it all too late. Welcome to: Marketing Myopia, the sequel.
Corporate Kool-aid
It reminds me the way marketers and startup founders need to think is not that different. In startup land we are just marketers at the micro level. In fact, what we are after is becoming successful enough to have a systematic approach of going to market. Which then becomes the seed as to why the next cohort of startups can come to exist. The startup by definition disrupts a system. Most large companies are more in love with their system than they are in love their customers. What I mean by saying this, is that once most large companies have a proven way of solving peoples problems, they want to stick with that system as long as possible. They want to stick with the system because that is how money will be made, by leveraging the system that was built. The thing that made a company big (read here systems, product, sales channel, technology et al) often turns into a form of sacred cow or sun God. Without even realising, managers and the entire corporation revere their go to market system as ‘the way’. The good news for startups is that just because it was the way, it doesn’t mean it will always be the way. It is easy to drink the Corporate Kool-Aid when the taste is the high wages resulting from corporate ladder climbing. It is clear that not rocking the internal boat provides a standard of living that is above and beyond the ramen noodles entrepreneurs live on. This is our opportunity.
The Culture of Myopia
If you’re looking for an industry that is ripe for disruption, then what founders must look for is the Myopia. Lazy corporate incumbents who believe their infrastructure is what makes them powerful. A company who is more focused on asset utilization than they are on problem solving. In the end, our opportunity is the natural flow-on effect of the success bigger players have already had and the culture it results in. During times of revolution, even the biggest and most powerful players forget what business they are actually in.
Featured image source: Michael Elleray