One of the great metaphors to explain marketing tactics is the game Risk – the game of global domination. Building a company in an emerging market is a bit like Risk, except you don’t have the board in front of you. As such, the companies that are often the most successful are those that quickly develop methodologies that enable them to effectively balance strategies of focused attack, with measured exploration.
According to our friends at Wikipedia, Risk is:
…a turn-based game for two to six players, and is played on a board depicting a stylized Napoleonic-era political map of the Earth, divided into forty-two territories, which are grouped into six continents. Players control armies, with which they attempt to capture territories from other players. The goal of the game is to control all the territories—or “conquer the world”—through the elimination of the other players. Using area movement, Risk ignores realistic limitations, such as the vast size of the world, and the logistics of long campaigns.
Marketers often use Risk to explain the importance of focus, citing that the classic losing strategy in Risk is too spread your forces too thin. Players that spread their forces too thin never ‘win’ anything. Over time those areas where they have some presence end up getting picked off bit by bit by opponents that pour focus into winning their specific position. Sounds pretty easy, right? Focus on a specific area, win it decisively, then leverage that position to win new areas. Well, it is a bit trickier when you are trying to develop a position in a new market. Why? Because you do not have a map!
In Risk, the foundational assumption is that every player has perfect information. They know what the geography of the battleground looks like, they know where their opponents are located, and they can even see how large their forces are in specific areas. This type of information is available in established markets. For example, it is possible for a marketer to quickly understand that in the carbonated beverage market, Coke has X market share, Pepsi has Y and so on. In new markets, where the business models are evolving and new technologies are changing categories, this gets a bit trickier because these things are undefined.
In other words, attacking a new market is like playing Risk without a map. Each player is dropped off in a different location with a small army and limited provisions. Thus they know their particular area, but do not start with knowledge of the entire terrain. That makes things tricky. Are you on an island? Are you on a massive continent? Are you at the highest point, or are there more advantageous positions nearby? You simply don’t know. This changes the game considerably. You not only have to use your army to fight and win new territories, but you also have to use them to QUICKLY understand the battlefield so that you can more effectively play against your opponents.
The good news is that when there are scenarios of competition where their is imperfect information, there is a huge amount of opportunity. If you can figure out the real ‘map’ before anyone else AND execute with focus given that information – you win. This is how small companies beat larger companies – they get the map first and attack a key beachhead hard. So if you are starting a company, make sure that you iteratively develop methodologies that enable you to continue making focused progress while undertaking measured exploration. Make sure that from the get-go you set up a process for measurement and experimentation so you can quickly chart the course.
On the web, this is a must as the landscape is not only uncharted, but often subject to change. Enough pontification for one day. Happy Saturday!