Geoffrey Moore recently posted an article about Volkswagen’s EV plans that dealt with the topic of core versus context. In it, he defines core to be “whatever differentiates you from your competition, causing customers to prefer doing business with you.” Context is “everything else you do…to meet industry expectations as efficiently as possible, to not disappoint.” The argument is to build the core yourself, and outsource the context as much as possible. Put all of your engineering efforts into making your core standout, and do ‘enough’ on the context to get into the game.
When introducing a new product, there is a related concept to focus on the ‘minimum viable product’ MVP. Get into the market with speed and efficiency, and then let the market lead your expanded development efforts. The problem is that buyers generally struggle to differentiate competitors, and an MVP connotes it is just enough of a product to be considered a competitor, but not much more. To Use Geoff Moore’s terminology, it has enough context to get into the game, but not enough core to cause the market to shift to doing business with you. MVP sounds like a ‘me too’ product offering. Particularly in an established market, it is nearly impossible to stand out and gain traction with a ‘me too’ offering. Established markets are sometimes referred to as the ‘one plus’ phase of a market lifecycle, where the big news is that a vendor offers one more feature, or one new color as the ‘major’ upgrade. Mobile phones are largely in this phase now. The big launch is a slimmer case or a battery that lasts a little longer, rather than any meaningful new capabilities. Bringing an MVP to a market in this phase is a fools errand.
Those of you who know me know I hate the MVP concept. To me, it sounds like a vendor aiming for mediocrity. Your MVP is just another drop of water added to a large swimming pool filled with water. No one will notice. I never want to launch products that are just ‘viable.’ I want to launch products that are ‘successful,’ so I believe the bar should be Minimum Successful Product — MSP instead of MVP. When we focus on a successful product, we have to understand what our core is and why people will buy from us instead of the other competitors. In the Volkswagen example, why will a buyer choose a VW EV instead of a Tesla or a Volvo, or any of the dozens of competing EVs on the market? In the first round, the traditional automakers launched EVs that were MVPs. Most of the offerings were just retrofits of existing vehicles with nothing unique or innovative, and they did not make a dent in the Tesla market. In this next round of EV launches, companies like VW are finally aiming for MSPs, and bringing their core strengths to the table. It should become a pretty interesting market.
The lesson from defining your core versus context is to truly understand your unique value proposition and honestly evaluate if it is enough to make you stand out from the pack. If not, then you have to double down on your core and attempt to redefine the game to be one where you can be the leader. In the seminal work by Trout and Ries “Positioning, The Battle For Your Mind,” the authors describe competitors as being on the rungs of a market ladder. The leader is at the top, and others are on the lower rungs. The concept of positioning is to define a market and a ladder where your offering can be at the top. Defining your ladder means thoroughly understanding your ideal customer profile (ICP) and featuring your core value proposition in a manner that positions you at the top of the ladder for your ICP buyers.
Harkening back to Geoff Moore’s Volkswagen discussion, he states that “to differentiate, we have to field an offering that is deeply compelling to our prospective customers and at the same time one that our competition either cannot or will not match.” The conclusion is that we have to narrow our view of the total addressable market to the segment of the market where our core strengths enable us to be at the top of the ladder. To break out, all of our engineering effort needs to be concentrated on making our core compelling, and all of our go to market engine has to focus like a laser beam on the narrower ICP where our core capabilities resonate.
Like the kid in the candy store who is distracted by all the possible sweet treats, it is hard to avoid distractions or ignore all of the possible buyers in the total addressable market so that you can focus exclusively on the smaller ICP segment. Many marketers want to deliver broad messages that are vague on details so that their net will scoop up as many shoppers as possible. That is the opposite of a capital efficient approach to capturing the specific ICP buyers that will be attracted to your MSP. The result will be a lot of wasted sales effort wading through the misfits or trying to compete with undifferentiated products solely on price. Concentrating on your core and hyper-focus on your ICP will win the day.