Here we go again! In no particular order…
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“How do you distinguish between an opportunity to be seized and a temptation to be resisted?” - I heard this quote on a podcast recently (it is attributed to Rabbi Lord Jonathan Sacks). It was intended a life advice but I have never heard someone more succinctly explain an attribute of the unstoppable companies I researched as part of my doctoral work. I called it “Active Abstinence” - the ability for a company to define a vision and strategy, and then be relentless in the pursuit of it, ignoring exciting but ultimately distracting things along the way. For clarity, this didn’t mean they ignored new information and refused to pivot where worthwhile, or if great opportunities came up that were relevant they refused to capture them (quite the opposite). But too many (most!) companies (and people it would seem) can’t tell the difference, and throw good money and time after temptations. Is it worth writing about how you tell the difference? You tell me.
Genericide [noun]: when a brand name becomes the term used for all similar products in that category. e.g. bandaid, kleenex, hoover. I just discovered the term for this phenomenon this week. Hilarious. Ironically also a goal that I’ve heard many clients (and bosses and random stakeholders) pursue over the years because they mistakenly think this means dominance, but - as the term suggests - it actually means total commoditization (and ultimately loss of trademark). In other words, if they’re all bandaids why should I spend twice as much on the brand name one as the generic one?
Size the problem, not (just) the market. I’ve been looking at a lot of pitch decks lately (long story) and am amazed at how many (all) stop at sizing a market - ie. they work at putting a dollar value on a TAM (total addressable market if you’re unfamiliar with the acronym) and don’t go to the trouble of sizing the problem that they’re solving. The thing is, often TAMs are made up of a multitude of problems, and it can be quite misleading to assume that the problem you’ve identified (which you’ve built your solution around) overlaps completely. In fact in almost every case it won’t. Yes, it might make your numbers look snazzier but it sure won’t give you a true representation of what’s going on. So what to do instead? Here’s a quick overview (if you want more detail, LMK):
Figure out the TAM for the category you’re working in. Put some numbers around it. This is far from an exact science, but typically you’ll find that someone with a lot more time, resources, and access has already done something you can work with - just make sure you understand how they arrived at the number so you can adjust for anything you don’t agree with.
Figure out the core problem you’re solving (not the market you’re playing in).
Identify how that market is broken up *by purchase drivers*. Yes, this might take some time. But what you’re looking to understand is - say - how many people buy baked beans because they use them in a specific recipe Vs their kids like them Vs its all they can afford Vs they’re doomsday preppers Vs they like to have a can or two on hand in the back of their pantry for emergencies… etc.? Because perhaps none or only some of them are going to be interested in your new bougie, prettily packaged, high protein, low carb, organic, RSF, GF, DF, paleo, kosher ones which are priced 30% higher.
Revisit that problem you’re solving. How is it currently being solved by all people with this problem? For example, are people DIY-ing? Do they use a franken-solution, cobbled together using a variety of things from different places? It’s not bad if your problem is currently fully solved by an existing product / products in a market (but you’re going to have to double down on your stand-out variable - price, service, experience, something). Ideally though here you’re going to be able to rethink that TAM for your problem because you will have other markets you can capture customers from. If this is the case, put some numbers around it (that just means figure out what these current solutions might be worth).
Go back to that TAM and take out the portion you can specifically attribute to your problem. Add in the current solution value/s you calculated.
And there you have it… a sized problem, not just a garden variety TAM.
For bonus points, you then want to size your solution - ie. build some conviction that your specific solution to this problem has legs. But that is most definitely a convo for another day.
Anyway, that’s enough tidbits! On with your Tuesday! But before you go, if you liked this… please subscribe. This newsletter is free and I don’t plan to charge.