Winning isn’t for everyone

Nike is unveiled its newest campaign, “Winning Isn’t for Everyone,” featuring a collective of the world’s greatest athletes, all motivated by victory.

I LOVE this campaign. Why?

It’s a reminder that it is more common in technology investing that it is a “winner takes all” strategy. The "winner takes all" investing strategy is like betting on the best player in a sports league. Instead of spreading your money across many different players (or stocks), you focus on a few that you believe will be the best and could dominate the market. In the AI supercycle you are seeing some of this, but since there isn’t clear signal to a single AI platform, investors are hedging bets. Think early days of search engines, Yahoo, Altavista, etc. Google emerged because they had a novel business model and technology that crushed the rest.

Previously, I wrote about Blue Ocean vs Red Ocean strategies. If you default your strategy to a Red Ocean strategy at first, you can better exploit what may appear to be a Blue Ocean strategy later. The opposite is impossible.

Thinking in terms of co-opetition vs competition seems pervasive in the AEC industry. The driver to growth being macroeconomic drivers. I interviewed several AEC firm CEOs to tell me about the record growth they have experienced.  When I dug in and asked “What did you do to attain this record growth?” The generalized answer that I was given.. “We had capacity and did good work.” The “rising tide, floats all boats” strategy. The prevailing culture within AEC is that you are doing great, if you win your “fair share”. I just realized that I am crushing the “ “ game in this post. This is an industry that does 10 year strategic plans, doesn’t view the world as a competitive landscape and doesn’t wake up every morning trying to “win”. Like Nike says, “winning isn’t for everyone”.
While my weekly Sunday Scaries is read by a lot of startups, I have noticed a lot of AEC executives signing up. As it is hard to write for more than one audience, I treat them as lurkers. So, why do you care as a founder? In the world of “both can be true”. AEC tech founders come from the industry and understand it. AEC tech founders grew up in the AEC culture and may not have the winner takes all attitude.
The first question I ask in a pitch..”If you win, who loses? and what does winning look like for you?” I rarely get great answers and when I do, there is a lack of thoughtfulness as to how they will win.
It’s not always popular to have my point of view, but I am also the guy that stopped playing indoor soccer because I spent too much of the game in the penalty box. If you don’t have a competitive trait, it may become a problem.
While everyone is happy with a rising tide floating all boats, you need to be playing Battleship.
As a startup, you may be competing with a large incumbent technology company or even your customers in the long term. So, what do you do now? You don’t wear it on your sleeve. There is the “plan” you share with the larger team and then there is the “plan” you share with your board. Here are some tips for the David and Goliath scenario-

1. Understand their organization and who they consider their most comfortable and complacent markets and customers. Why? While they pay attention to them, they do very little to nurture the ongoing relationship. IBM Notes vs MS Exchange
2. Find a segment of their market that you can own. Whether it’s geographic, industries or product. Microsoft PowerPoint vs Canva.
3. Once you are in market, re-target their Senior level employees with social media.
4. Once you start winning, figure out their top salespeople and hire someone to target their specific clients. A top salesperson goes straight to the CEO when they feel threatened. They have been sitting fat, dumb and happy on these accounts. They get very upset when you mess up their high earning quality of life job.
5. Do not copy their marketing tactics. You will never outspend them in a head to head marketing plan. Get creative and be ruthless. I was once banned by a large sw company for throwing an amazing party in Vegas. I got the “expo only” pass and walked booth to booth and handed out a secret invite. Inside, it specifically said “please don’t bring your boss, it’s not that kind of party!”
6. Create secret alliances. Bing watch some of the first seasons of Survivor and get some tips.
7. Deeply involve your board. Everyone likes super secret plans and they can be very helpful.

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This is just a few. If you want more, I have them. Probably left best to discuss at my next secret meetup.