This is a transcript of the “Competitive Intelligence” Podcast, Episode 36. If you’d rather listen to the podcast, click here.
Sean Campbell: Welcome to another episode of CI Life. In this episode, we’re going to tackle something a little bit different for us, although we tend to say that almost, I think, at the start of every podcast, because we like to have some variety in this. Let’s imagine, for a second, that we’re in charge of iOS 7. iOS 7 is interesting, because even if you’re not a real Apple fan, or you don’t follow tech, iOS 7 is at that point in the product evolution of iOS where they’re now under threat. Android is being used more and more, it’s had a long run as a product.
You can find other analogies to this, where products have had numerous iterations, and eventually they face more and more staunch competitors.
What we want to do here is talk about, let’s put CI in somewhat of a specific product context. If you were in charge of iOS 7 development, what kind of CI would you be looking to do? What CI might you have already done, since iOS 7 is now in beta?
We want to give folks some context, by using somewhat of a hypothetical analogy here, how does CI get used when it leaves the bounds of the CI team? How do you see product teams, and individual teams in a company, use CI?
Let’s start with one of the very first things we tell people they always have to do. You’d be interviewing customers who use the competing solutions.
Scott Swigart: When there’s some instance where somebody has looked at your product, looked at the alternative, and chosen the alternative, do you really know why? Just because you know why doesn’t mean that you’re necessarily going to try to address every one of those segments, but it’s important to be intentional about which customers you conceivably want to compete for, versus which ones you don’t.
What we find is, people are busy, and they have limited contact with customers, is they just don’t know. They simply do not know, when they lose, why? What did that decision really turn on?
Sean: Especially if this is more B2B. Let’s take this another step and let’s say we’re really focused on Apple phone and iPad usage in business. With consumers, there’s a lot of open‑source intelligence you can gather. You can run broad‑base focus groups. There’s a lot of signal about what consumers like and dislike, and then there’s this whole discussion about, do you give a consumer the product they ask for, or do you lead them to another shining hill that’s the thing they really want, but they don’t know it? All that kind of stuff.
With businesses though, it’s a little bit different. Even if you could maybe lead them to a more shiny hill on the horizon, the simple fact is you’re usually going to be at least a little more successful if you listen to them, at least somewhat. They do have a very specific economically‑oriented reason for why they want what they want, typically.
Scott: Business decision making, generally you’re talking about a group of people who influence the decision. If you’re looking at selling 1,000 tablets into a business, the diligence that they put into that decision is a lot more than somebody buying a Christmas present for their spouse. The way that they evaluate it, the things that the decision turns on, the reason that they ultimately chose to go with one product versus another, was it even characteristics of the product that mattered? Do they view these products as relatively equal on a feature basis, and it came down to other factors? These are critical things to find out.
Sean: Aligned with that, a critical thing is understanding, what is the job your product is specifically doing for that customer? What is the job the competitor’s doing? They might not actually be exactly the same, and that critical insight alone can lead you to some pretty big “Ah‑hahs” about, “Maybe we’re not entirely competing in the same space. Maybe the matrix of who they compete with and we do is a little bit different. Maybe there’s even room for both of us and the customer, and the customer honestly sees us as both having a spot that can meet their needs.”
Scott: It’s a classic, “We’re not even playing on the same field,” where it’s conceivable that a customer may buy some of them and some of us. “It’s inconceivable that we would never get 80 percent of the market, no matter what we do,” kind of thing.
Sean: Another big thing is, and this comes from a great book called Business Model Generation, which basically talks about this framework called the “Business Model Canvas,” which we tend to bring up in CI training sometimes, and in mentoring efforts, because we find that one of the things that’s a real critical skill about CI is you have to be able to decrypt the competitor’s business model. There’s always this discussion about, “Do you need industry expertise, and how much do you need it?” I think you and I tend to feel that to really execute on insightful projects on an industry, you do need some industry expertise. We know there’s people that feel differently about that.
At the end of the day, you have to, at a minimum, be able to understand and crack the code on the business model they’re using. If you can’t contrast your business model with theirs effectively, you don’t even know where to look for information and collection activities, and you certainly might have the wrong frame of mind when you’re doing your analysis.
Scott: There’s another great framework that feeds into that, “four corners analysis,” where you look at the competitor in terms of their functions, their motivations. We recently did a project where the competitor we looked at had a CEO that’s been there since the ’80s, talks about how their company has never done an acquisition. This person’s 70 years old, and they have a certain revenue target that they’re driving for before they retire.
They’re not going to get there through acquisition. At least, that’s not their plan, because everything about their motivations and assumptions screams that they’re going to try to do this organically. That’s important to know, as you try to anticipate where a competitor’s going to be in two or three years.
Sean: This combination of four corners, with motivations and assumptions, and strategy and tactics, and understanding the elements that go into the business model. What channels do they have? What partners? What key activities do they engage in? All of these things are really, really important, and without some clear knowledge of what those are, and marrying it all up, it becomes very easy to do poor analysis on a competitor, or a competitive landscape.
Scott: It’s funny too, if you really put the time and effort into it, in some ways you can understand a competitor’s business plan almost better than they do. Sometimes they’re doing things because they work, and you realize it’s become a de facto strategy, but nobody there has necessarily really articulated that.
Sean: Exactly right. If you go back to this iOS, because that’s where we left things, what are some other things they should be doing? They should be monitoring the open‑source intelligence that’s out there. One of the things we see companies skip over sometimes is getting the open‑source intel. Sometimes that can be even slightly better than some of the human intel that you get. Whether that’s understanding the culture of the company, or looking at traditional things like earnings, transcripts, or tracking things in social media, or looking at what the individual employees in the company have leaked, or communicated, or discussed about what they’re doing. All of these things play in, and this is straight from the halls of open‑source intelligence.
Scott: Absolutely.
Sean: Then I think that one of the other big things you’d have to be thinking about if you’re iOS is that you’d have to have a longer horizon. You can’t be just looking at what the competitors today are going to do. You’d have to take something like scenario planning, or similar frameworks, and say, “What are the trends and critical uncertainties in my market, moving ahead? What are the various scenarios that we might have to face, as a company?”
Try not to boil the ocean so you have a view of how the future’s going to turn out, because that’s not really a safe way to play the game.
Scott: Think about something like Google Glass. Are there potentially disruptive innovations on the horizon that you’re not factoring into your planning? You take a look at something like Google Glass, and there are ways to fairly objectively and empirically determine what the trend for this technology is going to be. It has practically nothing to do with what people are saying about it.
Sean: What you’re talking too there is the “throw in one other” framework. You’re probably talking to innovators, and not even early adopters yet, from the crossing the chasm. These people are not really the bulk of the market. They’re not the people who are really going to tell you whether Google Glass is going to take off. If you were an iOS 7 project manager, head of development, whatever, you might be very tempted to say, “See, look at all these reviews, that basically say that no‑one wants this, it’s a privacy concern,” but I think both you and I know that from a technology standpoint, almost any technology that’s ever entered the market that’s been significantly disruptive, in terms of input modalities, has always had privacy concerns wrapped around it.
There was a day where we were worried about bringing smartphones into the gym, so to speak. I don’t think you ever hear anybody talk about that anymore, and the reason is because everybody has a smartphone.
Scott: That’s the thing. Look for the components of the technology that are not novel, because generally, with disruptive innovation, you’re dealing with something that’s an aggregation of things that aren’t particularly novel. I would be digging out quotes from back in the time when cellphones first started to get cameras, about what people said this was going to mean, and how much of that is being echoed today at something like Google Glass, versus what actually happened with that technology.
Sean: Which is the power of the historical analogy. With that, I think we’re going to have to wrap this up. We’re a little over time.
Sean: We’re going to let folks get back to work, and hope to have you join us for the next podcast.
By Sean Campbell
By Scott Swigart