The villainous competitor positioning pattern

by Jason on June 8, 2011 · 0 comments

Books by Orwell, photo by markhillary

A quick followup to my post on Infinite innovation vs sufficient suckage, which was actually born out of the ideas in this post.  There’s a pattern emerging, which I mentioned earlier, about companies positioning their crappy offerings as “slightly less crappy” as the ones from the established player in the market.  We’re seeing it in Canada’s mobile phone market, interestingly, from these players themselves: each major brand has a downmarket brand that’s completely independent and offers reduced or eliminated fees compared to what you’d pay from big name X.

I honestly don’t know how many consumers don’t realize that the “rebel” brand is the same actual company as the one they’re poking at, maybe it’s completely transparent, maybe not (my nonscientific research suggests that not a lot of people know that Bell Mobility owns Virgin Mobile Canada, as one example) but that doesn’t matter today.

What’s going to happen (or has it happened already) when a few of the big players get together to invent a demon to better position their offerings against?  Kind of a 1984-ish “we have always been at war with Eurasia” thing, but on a corporate level?

I see this pattern with founders leaving their original company to start a competitor, where the story seems to be “this is my chance to do it right” combined with “I’m not happy with the direction my first venture is going under the current ownership, and I’m here to save consumers” but what if we accelerate that and imagine that there are founders who are working, right now, to build a company with the explicit but unspoken intention of an exit via sale to a larger firm, the proceeds of which would fund the build of “version 2.0”?  Like I said, this already happens as founders reboot, but the difference here is that it’d be part of the plan from the outset.  A still risky, but possibly better funded, and possibly fraudulent education, if you will.

Or, if you’re feeling more paranoid, there’s the conspiracy model, where a group of companies secretly fund a potemkin rival that they can all position against.

I can see a day, not far off, where as part of the pre-launch sequence for a venture there’s the founding of a seed company to test what customers truly won’t stand for.  It’s valuable market research, plus you’ve got that out of the gate “finally an alternative to the ridiculous practices of brand X!” positioning to capture the imagination of the public.

These ideas are somewhat cynical, a little paranoid, but I don’t think they’re too far of a projection of what I’m seeing right now, and it’s not limited to tech, but if the current bubble continues to grow I think it’s the best environment to watch for an accelerated microcosm for these ideas.

(And it should be obvious, this is mostly a thought experiment and in no way suggests that any company, mentioned or not, is doing or planning on doing something that’s not above board. It’s just one of those inventions that might already exist that I wanted to write down so I could refer back to it if (or when) it actually happens.)

Photo by markhillary

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