How to disrupt a sleepy incumbent
When building a product or company that’s designed to disrupt a sleepy incumbent there are four phases of typical interaction you’ll have with your future competition:
Phase 1: “Neat, they’re building a bus!” This is when you’re out proving problem/solution fit and product/market fit, as well as building out your team. The incumbents will know about you, but at this point neither they nor the market really care.
Phase 2: “Wow, that bus is kinda cool…” This is when the inherent “cool factor” of a new product will start working for you, and the incumbents you’re out to disrupt will start sniffing around — but mostly because it’s novel and interesting. You’ll get downplayed in this phase too.
The pivot point: This is the point where the markets perception of the ROI of your offering (with all things considered… risk, reward, actual cost, deliverables, etc) has crossed your incumbent’s. You’ll know this has happened when you hear “this is much better value than what we’re currently doing” as a frequent initial reaction from prospects and customers.
Phase 3: “Umm, this bus is kinda scary” Congrats! You’re now at the point where the incumbents realize you present a threat, and the smart ones will figure out a way to work with you. This is when you hire for channel and/or business development.
Phase 4: “Shit, they just ran over us with a bus” This is fairly self-explanatory… but it’s important to remember that partnerships are force-multiplying, so the goal isn’t to crush everyone… Just that ones that still oppose you.
Or as Gandhi put it:
First they ignore you (Phase 1),
then they laugh at you (Phase 2),
then they fight you (Phase 3),
and then you win (Phase 4).
Thanks to Chris Raethke for helping eek this idea out over a few Fireballs one night.