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Episode 118  |  12:01 min

#114: Don't Be Scared Of A Crowded Market

Episode 118  |  12:01 min  |  03.07.2018

#114: Don't Be Scared Of A Crowded Market

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This is a podcast episode titled, #114: Don't Be Scared Of A Crowded Market. The summary for this episode is: If you liked this episode, we bet that you’ll love our blog content. blog.drift.com/#subscribe Subscribe to never miss a post & join the 20,000+ other pros committed to getting better every day. ----- Crowded market? No problem. On this episode of Seeking Wisdom, we are unpacking why DC LOVES crowded markets -- and why the biggest mistake most startups make is not entering them. Competition is good (and we're going to talk about why). But also, we'll talk about the other half of this thing: you cant enter a crowded market and play by the same rules. You have to write your own playbook. Say hi to @dcancel and @davegerhardt on Twitter. And don't forget -- HYPERGROWTH 2018 is coming. Get your tickets at hypergrowth.drift.com with the promo code SEEKINGWISDOM.
If you liked this episode, we bet that you’ll love our blog content. blog.drift.com/#subscribe Subscribe to never miss a post & join the 20,000+ other pros committed to getting better every day. ----- Crowded market? No problem. On this episode of Seeking Wisdom, we are unpacking why DC LOVES crowded markets -- and why the biggest mistake most startups make is not entering them. Competition is good (and we're going to talk about why). But also, we'll talk about the other half of this thing: you cant enter a crowded market and play by the same rules. You have to write your own playbook. Say hi to @dcancel and @davegerhardt on Twitter. And don't forget -- HYPERGROWTH 2018 is coming. Get your tickets at hypergrowth.drift.com with the promo code SEEKINGWISDOM.

Speaker 1: So, man, we have cameras. We have amazing stuff in here. You just had a hell of a week.

Speaker 2: I've been gone.

Speaker 1: I don't want to give away all the secrets because you learn too many things, but tell me where you were.

Speaker 2: I was in Vegas.

Speaker 1: You were in Vegas.

Speaker 2: Can't talk about that.

Speaker 1: Okay.

Speaker 2: Then I was-

Speaker 1: No, you can. You can say where you were at.

Speaker 2: Oh, okay.

Speaker 1: That sounds better.

Speaker 2: Yeah, I was in Vegas. I went to the 10X Grant Cardone. Grant Cardone.

Speaker 1: Everything as advertised?

Speaker 2: Everything as advertised and more.

Speaker 1: More?

Speaker 2: More.

Speaker 1: Ridiculous.

Speaker 2: Redonkulous. And then I was in San Diego for a T& C, Traffic& Conversion, conference.

Speaker 1: Shout out DigitalMarketer.

Speaker 2: There may have been a brief stop in LA. Can not talk about that.

Speaker 1: You stopped in LA?

Speaker 2: That's called the dark op.

Speaker 1: When was that?

Speaker 2: That's called the dark op.

Speaker 1: I can't even think.

Speaker 2: Yeah. Oh. That was a black operation. I can't talk about that.

Speaker 1: I got to tell you guys something. I was on the flight home last night. DC was on the flight. I was in the last row of the plane. I was in the last row.

Speaker 2: Last row?

Speaker 1: My seat wouldn't even recline. crosstalk

Speaker 2: What do they have in the last row?

Speaker 1: They have nothing. My seat would not recline. So I'm in the last row, and this guy-

Speaker 2: Was I in the last row?

Speaker 1: You were not.

Speaker 2: Okay.

Speaker 1: What's the opposite of the last row?

Speaker 2: Oh.

Speaker 1: Okay.

Speaker 2: Okay.

Speaker 1: You were not in the last row, which is great. That's where we should be.

Speaker 2: I didn't know you were on the flight.

Speaker 1: That is where we should be. Okay. So I'm sitting back there. I'm sitting back there, and all of a sudden this guy comes back to me, a flight attendant-

Speaker 2: Uh- huh. Darrell.

Speaker 1: Darrell, and he goes, " Excuse me, sir." He goes, " I heard you were the VP of marketing at drift. com. inaudible you guys I've been sent here to give you a drink." And I was like, " What?" And he comes and he gives, I was with Lya, my wife, on the plane, and he gave me a vodka soda and said, " This is from the two gentlemen up front."

Speaker 2: Oh yeah.

Speaker 1: That was me and Elias, so it was nice. crosstalk It was nice. They did take care of me. They did take care of me. You know how Elias... I was talking to Elias and I said, " Something's going on here. You're not supposed to be sitting with me." Somehow he's kind of glommed on to where I sit.

Speaker 2: Oh, I didn't tell you this, but this is so... Elias came all the way back. He came back earlier. He was standing in the back of the plane talking to me.

Speaker 1: He did?

Speaker 2: We were working on some deck together. He comes back. I was texting him like, " Come look at this." Darrell came by when he was in the back and he said, " Did your friend jump off the plane? Where's your friend?"

Speaker 1: He got in trouble. He got in trouble. There's a camera in the back of the plane, I didn't know, and the pilot... The no seatbelt sign was not off. The pilot called the flight attendant and says, " Excuse me, that man, that little man in the back crosstalk, he needs to sit down." And so she told him. She's like, " The pilot just saw you on the camera and nobody should be out of their seats right now. You need to go."

Speaker 2: Wow. That's why he came back?

Speaker 1: Yeah. He didn't tell me that. All right. So that's my story for today. But the reason I asked you where you were because I was in the front row. Shout out as respect of your session at T&C. There were 7, 000 marketers in the room.

Speaker 2: Ooh, 7, 000.

Speaker 1: It was cool because I heard you talk about something that you've talked about before. But what I got to do is I got to hear... I got to see the reaction of people when you said something, and so it was amazing. It's the best marketing you could do. You were talking about entering crowded markets, and then when you talked about competition in crowded markets is when I literally heard people go, " Huh", and everybody started nodding their heads, and so I wrote that down and that's what I want to talk about today.

Speaker 2: Competition?

Speaker 1: I want to call it crosstalk competition. And here's what I want to title this podcast episode: I want to title it why you should enter a crowded market.

Speaker 2: Let's do it.

Speaker 1: But then what you have to do about it. All right. Now I remember what we're talking about.

Speaker 2: Okay. So when you guys started Drift everybody was like, " What the hell are you doing, man? This is the most crowded market. You're going into marketing and sales. Why are you going to enter this crowded market?" Chat. There's a million vendors in this space. And even as an investor and an advisor people ask you all the time, " Do you see there's too much competition in this market? I got this other market. There's nobody there." This comes up a lot, so this is what I want you to kind of riff on today.

Speaker 1: You want me to go ham?

Speaker 2: Yeah. So why is that? And I can already tell why should you go to a crowded market?

Speaker 1: So I get this question a lot. So Ryan, who was interviewing me on stage at T&C, Ryan Dice, what's up, the homie, he said he pulled up the famous market tech slide, which if you don't know it's the slide that has five to 7, 000 marketing and sales SAS vendors and it just keeps getting more and more crowded from our guy, Scott Brinker, who created that. He said, " Looking at that slide, why would you ever start another company in this area?" And what I said to him was, " I love that slide. That's why it is awesome." I love that there are five to 7, 000, whatever the number is, of companies in this space, because one thing that I've noticed that entrepreneurs love to do is that they love to chase or think about entering markets that have no competitors. And what I say is if there's no competitors in the market, especially in B2B, then there is no market. There's no money.

Speaker 2: So not even as a founder. Well, me, as a founder, entrepreneur, investor if somebody came to me and they're like, " DC, I'll pitch you on my company, I'll pitch you on my idea." And you say, " Great. Who are your competitors?" And I say, " There are none." What would you say?

Speaker 1: Not good. Go back.

Speaker 2: Not a good sign.

Speaker 1: There must be a competitor. So they might not be a direct competitor but there's someone vying for that attention, right? We have a limited amount of tension in business and in personal life. There's 24 hours in a day, and so if you're going to be successful in whatever it is that you're building, whether it's this water bottle here, that computer or piece of software, then you must be taking that attention away from something else. You are competing with something else to take that attention away, even if it's not a direct replacement. And so I say you want to move to markets that are very crowded and have a lot of companies in there because that means there's money there. If there's no one there, and this is what entrepreneurs usually say to me, is that, " I found an amazing market. It's the-

Speaker 2: Untapped.

Speaker 1: untapped, a zillion dollars." And then my question is, " Well, who is in that market?" Well, no one. So what market is there that there's a gazillion dollars in that it's not competing with some other resource directly or indirectly for it. Doesn't exist.

Speaker 2: The other thing about crowded markets I didn't realize until thinking through this, it actually gives you an advantage. If you can go into a crowded market you're going to be able to study what are all the mistakes that every... You're going to be able accelerate your learning as a founder as somebody in this company because you can study how did this company go to market? How did they sell? Or maybe they don't spend on ad words because they realized the cost per click was too high, so they've already learned that lesson for you.

Speaker 1: Yeah. That's called modeling.

Speaker 2: Modeling.

Speaker 1: A lot of people at the traffic and conversion conference sell information, courses, videos, that kind of stuff.

Speaker 2: Weight loss, workout, this and that.

Speaker 1: Exactly. And I was talking to one of the... I was on a boat the night before.

Speaker 2: Was that when you flew a helicopter onto a boat?

Speaker 1: Shh.

Speaker 2: Oh, sorry, sorry. It was on Instagram. We've all seen it.

Speaker 1: Okay. Yeah. Yeah. It was a big boat. It was a party boat.

Speaker 2: You know that that got me in trouble.

Speaker 1: Why? crosstalk Yeah, right.

Speaker 2: This always happens. I get in trouble for things I didn't even do.

Speaker 1: Okay. That's the way it should be.

Speaker 2: Lya, we went on a trip once and she wanted me to take a helicopter tour and I said, " Hell, no." And so she sees you and Elias on the helicopter. She was with me in San Diego and she goes, " This is bullshit." I'm like, " How are you mad about this?" She goes, " Because if I wasn't here, David and Elias would have pressured you and you would have been on that helicopter." And I was like, " Yes." And I was like, " This didn't even happen and you're mad at me because of that", so you got me in trouble.

Speaker 1: She's right. She was 100% right. 100. There we go.

Speaker 2: Yeah. Thank you, Lya. So I was on that boat and I was talking to a couple of entrepreneurs on that boat and one of them sold products in the weight loss category, okay? And he said something almost... I don't know how it came up, but very similar like, " Hey, I'm in a super- crowded market, weight loss." Can you imagine how crowded that market is? That's 5, 000-

Speaker 1: Crazy.

Speaker 2: 100, 000.

Speaker 1: Yeah, yeah. A million gazillion people in there, and he said that he loved it because people look at it as a crowded market but that means there's endless opportunity in there, endless dollars because it's a big giant addressable market. What you need to do because of once you're in a competitive market, that's the key. The key is not if it's competitive or not. It's can you approach, can you find a unique way into that market and approach that market just like this guy in weight loss did that he could get in, and he had a specific product that was doing amazing because he found a niche and a found a way into this crowded market.

Speaker 2: And that is exactly... You did this perfectly. That's exactly why I wanted to do this episode because that is the secret, right?

Speaker 1: That's the secret.

Speaker 2: You said this on stage and you said, " The thing that people get wrong is they enter a crowded market and then do the same thing as all those other companies," and so you have to know that. If you're going to go into a crowded market you say, " I'm going to go into a crowded market. However, now I have to play by the rules, which means I have to go rewrite the playbook."

Speaker 1: Got to rewrite the playbook.

Speaker 2: And that's why we've done things the way we've done them here since day one.

Speaker 1: Drift. com.

Speaker 2: Because drift. com, you guys knew when you started the company we're going into a crowded market. We're not going to win by doing it the same way everybody else has.

Speaker 1: Absolutely not. And so the reason is that people want this binary false choice, right? And I always say the answer is both. So they want to be able to choose going into this market, get into this market, and not have to change the way that they approach how they're going to react. So for me it's like find the competitive market and then look at it and understand it's competitive, therefore I must do something differently. So what I said when we were talking about SAS was that we were entering this very crowded market, chat, SAS, sales and marketing, whatever way you want to categorize it, but what we were going to do was first step recognize we were entering a crowded market, second step design a plan to re- segment or rethink that market, and third then implement a way to get attention in that market in a way that's nontraditional, in a way that other people are not doing it, and that's how you enter a inaudible and re- segment an existing market.

Speaker 2: Amen. Get the notebooks out, because that is the playbook.

Speaker 1: That's the playbook. I just gave you three steps. You didn't even have to pay for that. That was free.

Speaker 2: All right, man. That's all I got today.

Speaker 1: That's it?

Speaker 2: Pretty good.

Speaker 1: All right. That's pretty good. So we have a new camera here.

Speaker 2: Fresh.

Speaker 1: My homie, right over here, Amy's got a new camera over here. Wide- angle lens. We're blowing it up here. But I checked while I was on many flights last week.

Speaker 2: New camera, same rules.

Speaker 1: Yeah. I didn't see any shout outs for Amy. Didn't see any DHD shout outs. I'm looking for six- star reviews only.

Speaker 2: We did get some books in the mail. Somebody sent us some books, which is very nice.

Speaker 1: That's nice. That's nice. Did they send books and six- star reviews?

Speaker 2: No, that's the problem.

Speaker 1: Okay. So we need six- star reviews. I was on another podcast, Sales Genius.

Speaker 2: Shout out.

Speaker 1: Check that out. My boy Jim, and I saw Jim asking for six- star reviews. Jim, homie, that's patented. That's seeking wisdom only. But I hear you. I feel you. Six- star reviews. Go to Apple Podcasts. Open up that app. Leave six stars. If it's broken, leave five. Shout out Amy, DHD, and DG, and tell DG how he was wrong and Lya was right. That's all you have to say. No context is needed in that.

Speaker 2: Spell her name right. L- Y- A.

Speaker 1: Yeah.

Speaker 2: DG was wrong.

Speaker 1: Yeah.

Speaker 2: Lya, L- Y- A, was right.

Speaker 1: Preach.

Speaker 2: That's it. All right. See ya.

Speaker 1: See ya.

Speaker 2: Register for Hyper- growth. We're going to see you in San Francisco and in Boston. crosstalk You could do both. You could do one. All I can tell you is that DC and Elias have spent the last week at conferences, and I just know that the bar got raised about 15 different levels.

Speaker 1: Oh, man, we have some special people coming.

Speaker 2: We're going to have some crazy inaudible.

Speaker 1: Some of those trips we like to get some B roll of speakers that are going to blow your mind. crosstalk They're all going to be on this podcast.

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