Part of Barack Obama’s campaign strategy is to expand the universe beyond traditional voters. However you feel about his politics, it’s an interesting approach. In fact, it’s got a bit in common with how we target nonconsumers with our products:
We’re mainly targeting people who have never used products like ours before. These people especially crave simple solutions. They were nonconsumers before because the alternatives had too many features, were too confusing, and were too expensive. We’re addressing a hungry market that’s been ignored for way too long.
Instead of trying to win over people who love Gantt charts, we built Basecamp to win over people who had never used project management software before.
Likewise, Obama isn’t trying to steal a share of “the existing market,” he’s trying to create a new one.
Rather than relying exclusively on special interests and big money donors, he’s gotten a large number of smaller donations from first-time donors via the web. (Long tail anyone?)
And instead of merely competing for the votes of currently registered voters, he’s focused strongly on getting blacks and people younger than 35 registered in prime states. (Encouraging first-time voters “is going to be a very big part of how we win” according to Obama’s deputy campaign manager.)
Whether you’re competing for an election or customers, there’s a lesson to learn here. If winning over the existing market is a longshot, woo those who aren’t even in the game yet.
HB
on 17 Apr 08Also the Nintendo Wii’s targeting of the Senior Set illustrates this principle as well. The Wii doesn’t try to out-render its High Definition contemporaries. Instead, it tries to keep things simple and fun and is making a killing off of it.
Bud Caddell
on 17 Apr 08Matt,
How did you guys recognize the size of that untapped market? And their willingness to buy into it? Was it just your gut? Just that you totally wanted it, so you built it for yourself?
Luigi Montanez
on 17 Apr 08While it’s true that Obama’s been tapping into new markets, so to speak, I think what’s even more impressive is how the campaign has encouraged the new-to-politics supporters to become so deeply invested in the campaign.
The supporters not only give small donations over the Internet, but they’ve been essential in giving him victories in the primaries and (especially) caucuses. I liken it to angel investors in the tech industry. They give their own money and expect a piece of the pie in return, but for Obama’s supporters, that piece of the pie is the local campaign. Link: Barack Obama’s Angel Investors
ML
on 17 Apr 08How did you guys recognize the size of that untapped market? And their willingness to buy into it? Was it just your gut? Just that you totally wanted it, so you built it for yourself?
Yeah, it was mostly just looking in the mirror. We didn’t care about Gantt charts, etc. We just needed something simple and easy to manage our projects. When we started showing Basecamp around to colleagues is when we realized that others felt the same way.
Once we focused on selling it as a product, we knew we’d never be able to “out-Project” Microsoft Project. So we decided Basecamp would be something completely different, the anti-Project. And that’s how we reached an audience that was completely different.
Charlton Wilbur
on 17 Apr 08It also seems to me, from the point of view of a small software shop, that the really important question is not “how big is this niche?” or “how can I defeat all the competitors?” but “if I produce a product in this space, will enough people buy it that I can make a comfortable living at it?”
This seems to me to be the difference between the Microsoft definition of success and the Apple definition of success. Microsoft is focused on market share and dominating markets, and considers itself a success if it dominates or at least is a major player in a particular market. (Example: XBox.) Apple is focused on creating great products that are profitable, and while market domination is nice (example: the iPod, and the leverage it has given Apple to expand online digital content), Apple has spent the last decade and a half being quietly influential out of proportion to its market share because it produces great products that sell well enough to keep the company comfortably in the black (example: the iMac).
The Apple definition of success seems much healthier to me than the Microsoft definition, because it’s about something that Apple can control: the quality and profitability of its products.
GeeIWonder
on 17 Apr 08This seems to me to be the difference between the Microsoft definition of success and the Apple definition of success.
I know some of us like to use every opportunity to articulate how clever Apple is, but hypothesizing strategy and success definitions for a software (OS, really) company vs. a hardware company does not seem at all evident.
Microsoft uses leverage to make sure it’s OS runs with products and products are designed with it in mind. Hardware manufacturers need to know why they must spend the effort developing drivers. Apple uses, mostly, code developed from projects like Linux and FreeBSD. A lot of the time, these are descended from the Microsoft-driven drivers.
GeeIWonder
on 17 Apr 08Put another way, Microsoft is really a consensus, or STANDARDS company.
NewWorldOrder
on 17 Apr 08Interesting. I think this partly explains why winners of business plan competitions rarely do anything really huge beyond the business plan competition. Targeting nonconsumption makes for a “lousy” market research section.
This need to woo judges/investors/whoever causes people to go after existing markets and groom their ideas into sustainable innovations.
And we know from the Innovator’s Solution that sustainable innovations totally favor the incumbent.
harriet
on 17 Apr 08I can see the parallel.
Killian
on 17 Apr 08Gotta ask- did you guys have anything to do with helping set up the Obama campaigns new web based call-center for people to make calls from home?
Brilliant move on their part even if you guys didn’t help….
JF
on 17 Apr 08Killian, no, but it sure is impressive.
indi
on 18 Apr 08Interesting analogy to a point. In the end Obama still has to win a majority market share to succeed while 37S doesn’t.
JF
on 18 Apr 08Good point Indi!
Andrew Conard
on 18 Apr 08Matt – Thanks for your thoughts and assessment of the situation. As a leader in a faith community, I think that this concept has great relevance as well. Reshuffling current members / users / believers is not nearly as important as creating / attracting / reaching new persons.
hfytrf
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This discussion is closed.