If You Want to Learn, Look to #3

I'm obsessed with deconstructing what makes successful growth-stage companies grow.  What are the successful ones doing from a messaging, strategy, or execution perspective that makes them rise above the rest?

What I've realized is that looking to the top company in a specific category to dissect what made them successful often isn't helpful - at least from a sales and marketing perspective.

In fact, the number one company in a particular category is often there because they were a first-mover.  Ride sharing: Uber.  Home sharing: AirBnB.  Cloud storage: Dropbox.

First movers have a huge advantage if they can get to mass market quickly, which is often why these types of companies raise huge sums of money to grab mind- and marketshare.  First movers become the brand name.

How many hotels now have an 'Uber pick-up' location?

How many hotels now have an 'Uber pick-up' location?

First movers often (not always) have the best product.  CRM?  Salesforce.  Marketing automation software? Hubspot.  Social network? Facebook.  The leaders in each industry/category that you can think of - from software to automotive manufacturing - are often the leaders because their product is genuinely the best the market has to offer.  

In fact, even the second company in the category, the 'number two' is often drafting.  They're picking up what number one can't handle, or a offering a great direct alternative to number one.  They're waiting in the wings to pounce on the mis-steps of number one.  

Look at what Lyft is doing now in the ride-sharing space.  Focusing on international expansion and the fair treatment of the drivers, Lyft raised $1.5B, and (locally) appointed Aaron Zifkin (shout-out to my boy!) as the Managing Director of Lyft Canada.


However, to get the best learnings about scrappiness, and determination, trial-and-error, look to number three in the category.  Number three may not have the best product (at least not yet), and they don't have the luxury of drafting on the tailwind of number one.   Number three has been getting their asses kicked.  They've been through 'the dip', and are fighting, and innovating in all ways to steal market share.

It’s not that I’m smart. It’s that I stay with problems longer.
— Albert Einstein

Some great example of a 'number three' in my experience would be Pipeline Deals in the CRM world.  Pipeline Deals is a scrappy company competing with the likes of Salesforce, Pipedrive, Zoho, and a long list of others.

Pipeline Deals distilled a CRM into the basics.  They have a much less aggressive, but incredibly helpful and human sales and customer success team, and have simplified the onboarding process for new customers.  Of all of my CRM implementations, Pipeline Deals was the least painful.  And I made a point to tell them that:

I’ve implemented Salesforce.com at two other companies, but when it came time to set up a new CRM at Intellitix, I wanted to explore other options.  Setting up PipelineDeals has been WAY more simple and straightforward than Salesforce has ever been.  Thanks so much for making me feel like a person, and a valued customer, and not another number.

Other great examples of number three poised to overthrow number one include Canadian unicorn Ceridian.  A startup, turned scaleup, turned powerhouse as they battled, and fought, and and out-innovated the giants in the space with their acquisition and subsequent darling growth story of Dayforce.

Here are some common traits I see among 'Number Three Companies':

  1. They have grit.  They know they're up against giants but continually dig in to find a core group of customers that love their product, learn from them, and scale smartly.
  2. They're fighters.  They're hardened from a period of intense competition, and actually losing, or going through a dip in the past.  Growth couldn't hide their issues - they had to face them head-on and learned a lot in the process.
  3. They test - a lot.  Look at their websites over time.  They're testing messaging, offers, pitches, branding, and investing in new ways to connect and convert - constantly.
  4. They're customer-focused.  Their people actually engage meaningfully, and don't make customers feel like they're progressing through a standardized sales process.  Everyone company has one but it's the worst when you know you're being dragged through one.
  5. They know what they're not.  They've honed in on their niche and crafted their message over time to focus on what matters most to their core group of passionate customers and grown from those learnings.

I'm spending a lot of time now trying to find and learn all I can from these "Number Three's".  These are the sales teams I want to hire from.  These are the marketing campaigns to model off of.  

After all, the number one's can't stay there forever.  It's only a matter of time until the Queen gets knocked off her throne.  Watch out for the Number Three's.