How Strategy Therapy Cures the CDS (Competition Derangement Syndrome), The Never Ending Quest for Product-Market Fit - Tactician: #0099

I went to strategy therapy and it taught me that the only race you’re in is with yourself.

It’s like putting blinders on a horse so it can't see it's lapped the competitions for the 18th time.

15/04/24

How Strategy Therapy Cures the CDS (Competition Derangement Syndrome)

Why Read:

• Understand the dangers of becoming obsessed with competitors and learn strategies to innovate and create new market categories.

Featuring:

• Eddie Yoon, Co-Creator at Category Pirates, Christopher Lochhead, Co-creator at Category Pirates, Katrina Kirsch, Head of Publishing & Operations at Category Pirates

Link: 

• “Competition Derangement Syndrome: How Competition Ends High-Potential Companies & How To Cure It With Strategy Therapy”

Key Concepts and Tactics:

• Understanding Competition Derangement Syndrome (CDS):

  • Point: Competition Derangement Syndrome is a condition where companies make decisions based on obsessive reactions to competitors rather than strategic insight or innovation.

    • "Competition Derangement Syndrome is a condition in which decisions are made not out of strategic insight or innovative thinking but out of an obsessive, knee-jerk reaction to the competition."

    • "When a company and its leaders are suffering from CDS, each move is more about countering the other than genuinely breaking new ground."

• Recognizing the Risks of CDS:

  • Point: CDS stunts individual company growth, leads to industry-wide crises, and causes companies to miss opportunities for innovation and market leadership.

    • "When companies get caught up in the CDS cycle, they don't just risk their profits or market share. They risk their futures."

    • "The fallout? It's not just the millions poured into attack ads or the dizzying price slashes. It's the missed opportunities for innovation, the lost chances to lead the market into uncharted territories, and the lost category potential of a radically different new market."

• Anheuser-Busch Case Study: Overcoming CDS with Category Design

  • Point: Anheuser-Busch faced brutal honesty about their CDS and took a radically different approach with Bud Light Lime, creating a new category and generating significant revenue.

    • "Anheuser realized they had a severe case of CDS—and the only cure was brutal honesty and radical courage."

    • "The Bud Light mega-brand strategy generated $1.5 billion dollars of margin accretive revenue within a few years of launch. Anheuser's market share went up, margins expanded, and more importantly, the beer category grew significantly."

• Diagnosing CDS Symptoms:

  • Point: CDS can be identified through an overemphasis on competition, one-upping instead of innovating, obsession with trends, fear of being different, reflexive thinking, and over-reliance on consultants.

    • "A sure sign of CDS in others (or yourself) is muttering phrases like: 'Competitive advantage,' 'Competitor analysis,' 'Better product.'"

    • "If a strategy revolves around one-upping, you know it's a serious case of CDS."

• Curing CDS with Strategy Therapy:

  • Point: Strategy therapy helps companies shift from a competition strategy to a category strategy by embracing simplicity, honesty, and courage to define what makes the business undeniably different.

    • "Strategy therapy is how you move from a competition strategy to a category strategy. Unlike typical strategy planning, strategy therapy is an internal, emotional exercise that forces leadership into deep category design discussions about what makes the business undeniably different."

    • "The more you challenge yourself to define what makes you special (really special), the more you guarantee long-term success. The only way to do this is through honesty and courage."

The Never Ending Quest for Product-Market Fit

• Why Read:

  • Understand the paths to achieving product-market fit and how to navigate each one effectively.

• Featuring: Link: 

  • Team Sequoia, Venture Capital Firm

  • “The Arc Product-Market Fit Framework”

• Key Concepts and Tactics:

  • Understanding the Three Archetypes of Product-Market Fit (PMF):

    • Point: Recognize that there are three distinct archetypes of PMF based on how customers relate to the problem your product solves.

      • "We see three basic archetypes, each with its own distinct customer-product relationship dynamics."

        • "Hair on Fire: You solve a problem that's a clear, urgent need for customers. The demand is obvious."

        • "Hard Fact: You take a pain point universally accepted as a hard fact of life, and see that it's merely a hard problem that your product solves for the customer."

        • "Future Vision: You enable a new reality through visionary innovation. It sounds like science fiction to customers, either because the concept is familiar but sounds impossible (like abundant cheap energy from nuclear fusion) or because no one ever imagined it (like the iPhone)."

  • Operating Effectively in the Hair on Fire Path:

    • Point: Deliver a best-in-class, differentiated solution and combine it with aggressive go-to-market efforts to overcome competition.

      • "To succeed in such a dynamic, you must rise above the noise. The only way to do so is by delivering the best-in-class solution. And best-in-class products stand out because they are different, not merely better."

      • "The Hair on Fire path requires both a great product and a great go-to-market effort—in quick succession. This combination of solution, selling and speed is the key to overcoming the competition."

  • Navigating the Hard Fact Path:

    • Point: Educate the market about your novel approach and capture the opportunity by encouraging customers to change their current behaviours.

      • "The Hard Fact path entails getting customers to re-evaluate and change the way they approach a current process. This requires first educating the market, and then capturing the opportunity."

      • "Your novel approach may replace an existing market (like Salesforce moving CRM to the cloud) or it may create a new market (like Uber reimagining the taxi experience as a rideshare marketplace). Either way, you will likely face less competition on the Hard Fact path because the difficulty of changing the status quo has discouraged other founders from taking on the problem."

  • Pursuing the Future Vision Path:

    • Point: Attract and retain top talent for the long haul, find commercial opportunities along the way, and embrace unexpected turns in technology and market.

      • "The Future Vision path has the most ways to fail and the fewest to succeed, but potentially the largest payoff. Taking this path requires endurance and the ability to attract and retain top talent for the long haul."

      • "Assuming your vision is correct and you can find a viable path, time is on your side with the Future Vision archetype: You can amass an insurmountable headstart while the world comes around to your paradigm. But finding the right pit stops can be difficult. You must act with imperfect information—'live looking forward,' as Kierkegaard said—and the pitfalls are always more obvious in hindsight. Oftentimes finding the right path means embracing unexpected turns, both with the technology you produce and the market you serve."

  • Adapting to Fluid Product-Market Relationship Dynamics:

    • Point: Be prepared to move from one path to another as customer attitudes change or new products are introduced.

      • "Product-market relationship dynamics are fluid. Over time, many companies end up moving from one path to another as they introduce new products or as customer attitudes change about an existing product and underlying problem. Some companies straddle two paths at once. The point of this framework is not to irrevocably set your path in stone; it would be a mistake to identify yourself too narrowly with any one of them."

  • Striving for Continuous Product-Market Fit:

    • Point: Continuously innovate and evolve through different paths of PMF to build and sustain legendary companies.

      • "Legendary companies string together multiple product lines that evolve through one path of product-market fit to another. While one product may plateau, the next product starts rising."

      • "PMF may seem like a destination you're trying to reach—but keeping and expanding on it once you arrive is an ongoing quest that will last as long as your company does."

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