“Our culture celebrates superstars. We reward the product or the song or the organization or the employee that is number one. The rewards are heavily skewed , so much so that it’s typical for #1 to get ten times the benefit of #10, and a hundred times the benefit of #100.” Seth Godin, the dip, 2007.
Silver medals are getting smaller. Owners of private companies have an opportunity of being the best in the world at something. They just don’t know it yet. Being the best in the world does not necessarily mean HUGE.
You get to decide the sliver of the world you are going to dominate. In this technology-driven, social world we live in we need to be careful to decide who we are. Dominating a worldwide space has never been easier. Distribution costs, marketing costs, recruitment costs have all shrunk. Collaboration with disparate teams across continents is both productive and fun. Think of Skype, Dropbox, Google Voice, Mikogo. The list of free stuff that works gets longer everyday.
Being the best in the world at something may seem a little ambitious but look at the rewards:
Winner takes all
- US Ice Cream Sales 2006 – % share – Vanilla 29%, Chocolate 8.9%, Butter Pecan 5.3%, Strawberry 5.3%.(International Ice Cream Assoc)
- Box Office First weekend – Apr 3rd – Gross $ – #1 Hop $37m, #2 Source Code $14.8m (Box Office Mojo)
- Average margin of victory in all major tournaments over 25 years of golf was less than 3 strokes, yet winner took home 76% more in prize dollars than second place (212° )
- Horse racing’s classic races Kentucky Derby, the Preakness, Belmont Stakes – average payout to the winner is 400% more than second. (212° )
- Auto racing – Daytona 500 & Indianapolis 500. Over a 10 year period despite the races taking 3 to 3.5 hours to complete, the winning margin on average was 1.54 secs, the winning prize money $1.3m, second $621k (212°)
- iPad’s market share in Q4 2010 was 73%, second was Samsung at 17%. (Total Telecom)
- Search engine market share for March 2011 shows Google at 84.64%, second is Yahoo/Bing at 9%. (Netmarketshare) (although in the US Bing is rising & Google is falling)
As Dharmesh Shah CTO & Founder, HubSpot, pointed out in a recent blog explaining the recent $32m finance round – who can name the #2 to Amazon, NetFlix, VMWare, eBay. HubSpot of course is seeking to dominate in-bound marketing software.
Call to Action
As the owner/manager of an SMB the most effective path to growth is to define and dominate your space. You get to decide what that space is. You are allowed to lean on the past but you must curate what you do.
Being in the middle of the field is not safe, it’s dangerous. Go be remarkable and build a more valuable business and in time one that is saleable and liquid even if you hang on to it for fun.