Our washer and dryer was on the fritz today, and as I started to do some research on large capacity stackable units I started to get overwhelmed with all of the new terminology and features. After all, isn’t a washer a washer and a dryer a dryer. How many different combinations and features could there be? As I dug deeper I found myself thinking about these appliances less from a consumer’s viewpoint and more from a marketing one and appreciating how these various companies could make a commodity product sound so exciting and differentiated. Sure, all of the competing products had to check off performance, speed, and low energy but what really struck me was the marketing terminology they used to differentiate themselves. Rather than just sell a steam washer or dryer LG had TrueSteam technology while Electrolux offered PerfectSteam on their site. These appliances didn’t just balance well but LG used TrueBalance AntiVibration System versus the Perfect Balance System from Electrolux. Other features included the Direct Drive motor from LG for better performance while the Electrolux offered WaveTouch Controls. What this really helped me think about was how these various companies prioritized the features for their given market and how they differentiated themselves through their proprietary technology or secret sauce. And yes, I immediately began to think about how looking at marketing in the washer and dryer world would apply to startups.
Researching washers and dryers reminded me of several meetings I had years ago with a marketing expert named Richard Currier. His big thing was to take a basic technology, break it out into a few parts, and to give them sexy names. For example when Sybase the database company was on the market it was fighting with Oracle and others and ended up capturing a big chunk of the financial services market because it leveraged an innovation it called Two-Phase commit. Every sales person would lead in with the benefits of Two-phase commit and while other competitors may have had something like it, if it wasn't Two-Phase commit it wasn't good enough. What Sybase did was take one of its secret sauce technologies (innovative at the time, standard now), named it, and leveraged the crap out of it with its sales force. While the technology performed as advertised, naming it definitely gave it some cache.
Coming back full circle, I had a conversation this morning with an entrepreneur who was going after an interesting segment in the online video and marketing world. The company had some nice revenue for a bootstrapped operation. However I mentioned to the CEO that it seemed more like a one-off consulting or agency shop versus a scalable VC-backable opportunity. As we dug into his technology deeper and as I started to understand some of the magic behind his platform, I recommended to him that he think long and hard about figuring out what the secret sauce in the backend was and how to name it so he could better market his services and compete against others. While naming it won't in and of itself help him land more customers, I can guarantee that it will help his company sound more exciting and innovative versus companies that do not. And in the end whether the deal is closed the sales prospect will certainly remember and question how important TrueBalance Antivibration and WaveTouch controls are to his purchasing decision.
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