543: The Marketing Mistake (Almost) Every CMO Makes w/ Christopher Lochhead

ABOUT THIS EPISODE

In this episode we talk to Christopher Lochhead, 3-time Silicon Valley CMO and host of the Legends and Losers Podcast.

LinkedIn: https://www.linkedin.com/in/christopherlochhead/

Wouldn't it be nice to have severalthought leaders in your industry know and Love Your brand? Start a podcast,invite your industries thought leaders to be guests on your show and start reaping thebenefits of having a network full of industry influencers? Learn more at sweet fishMediacom. You're listening to the B to be growth show, a podcast dedicatedto helping be to be executives achieve explosive growth. What you're looking for techniquesand strategies or tools and resources? You've come to the right place. I'mJonathan Green and I'm James Carberry. Let's get it into the show. Welcomeback to the BE TOB growth show. Today we are joined by Christopher lockhead. Christopher is a three time Silicon Valley CMO. He is the host ofthe legends and losers PODCAST AND THE CO author of a new book. Playbigger, Christopher. Welcome to the show, Jonathan. I'm so glad to bewith you. Thank you for having me. It's a pleasure to haveyou here. I mean you're your resume is an incredibly impressive I'm excited tosort of dive into today's topic. We're going to be talking about the marketingmistake that almost every CMO makes, and if there is someone out there whoknows what this mistake is, it would definitely be a three time Silicon ValleyCMO such as yourself. But before we do you get in today's topic,I'd love for you to sort of tell our listeners a little about yourself andkind of what you're up to these days. Well, as you mentioned, I'ma former three time public company CMO in Silicon Valley. Today I livenot too far from Silicon Valley and a beautiful beach town called Santa Cruz,California, and I retired shortly after after the book play bigger came out,and took some time off really trying to think about what I wanted to do. And here is the big Aha. This sort of a couple things cametogether, Jonathan. One was at the time play bigger was coming out,there was a story in the Wall Street...

Journal that that stopped me in mytracks. The headline of the story said the crisis in American entrepreneurship and Ithought, crisis in American entrepreneurship, what are you talking about? Everybody intheir brothers and entrepreneur being, you know, in Silicon Valley. And it turnsout that's completely wrong and we are at the lowest level of entrepreneurship inAmerican history and more companies die in our country every week then are created.Wow, and you know that's not okay with me, because I think entrepreneursbuild our country, in our world. And I'm also somebody, Jonathan,for whom entrepreneurship is not a theoretical discussion. When an entrepreneur rises up or bringsthemself up, they can bring up a whole community or a whole neighborhoodor a whole family and and so entrepreneurship for me was a way out andyou know, it breaks my heart that that's not happening more. And thereality is every product, service or innovation that you and I love exists becausea legendary entrepreneur got product, company in category right at the right time.And so I've decided to dedicate the back half of my life to trying tostoke entrepreneurship and help entrepreneurs and entrepreneurial companies be even more successful. Yeah,well, and that's fantastic, and I know we do have plenty of entrepreneurssort of in our audience, which is, which is great. So I thinkthat idea speaks to them. You know, I I myself a sortof part of a smaller startup company that's that's grown through innovation, which isfantastic, but it is a struggle. I mean you do see that.There are so many companies that fail all the time. I'm you know,there is a desire to be an entrepreneur, but I think it's fantastic what you'redoing encouraging that, making sure that that idea and those ideals persist,because it can be very difficult. So...

Kudos to you for doing that.That's fantastic. Also, you had mentioned Santa Cruz, the the beach downCaliforn him from San Diego myself and have actually had the opportunity to do alittle wine tasting up in Santa Cruz, which some people don't know. It'sa fantastic place also for for wine tasting, which is which is great. Soyeah, we kind of have it all here, you know, rightwe got a great beer scene, as you mentioned, we have a lotof great wineries in the Santa Cors Mountains and obviously it this is a wonderful, you know classic California Beach Town Yeah, yeah, and I think served asthe inspiration to the SSH horror movie the lost boys. I'm not ahundred percent on that, but that's absolutely right. Okay, absolutely right,and I think. I think they're getting ready to film. I want tosay it's the new transformers movies here here, because one of my next door neighborskids, WHO's about sixteen, is was trying to figure out how tobe be an extra in the movie, because I think they're going to shoota scene on the boardwalk. Wow, that's great, that's I love that. So, Christopher, let's let's get into today's topic. It's it's abit of a mystery for me. We had exchanged a few emails back andforth, but we kind of left it off a bit ambiguous. But weare going to be talking about this idea, the marketing mistake that almost every CMOmakes. So, Chris Rom you know I'm as much in the darknow as our listeners. I'm going to let you take it away. Thankyou. So the mistake that many of us make in business is we makean unquestioned, unexamined, unconscious decision to position ourselves, or that is tosay, attack a market when we launch a new product, company, serviceor brand in an existing category, and what we do is we get we'vebeen trained that what there is to do is go after a large market categorywith a meaningfully better product. And the...

...other unconscious choice we make in thiswhole paradigm is we make a choice to compete. And many business books we'veread or all about how how to compete and win. HMM. Well,it turns out, Jonathan, that that's not what legendary innovators do. Legendaryinnovators is a matter of fact. Many of them refuse to have their innovationcompared to anything. They want to be considered the first. They want everythingelse to be compared to them. They want the world to believe that beforetheir new carbondingulator, the world was a one way and now it's a wholenew way, and so there's a before it and after. Steve Jobs didnot compare the iphone to the blackberry. That's not what happened. You know. Henry Ford did not compare his innovation to anything that came before, andneither did Sarah Blakeley with banks. She didn't call it a girdle to doto. And so what I'm suggesting is that legends create new categories by educating theworld in particular about the way they see a problem and therefore a solution.And when you do that, you move the market from the way it wasto the way you want it to be, and that's how you get Netflix andban and and blockbuster going bankrupt, and that's how you get whole newcategories, you know, like we see almost every day now, particularly inthe technology industry. Yeah, yeah, well, and and you know,it does seem you had mentioned Netflix and blockbuster. You know, it's youdo see these categories where where an existing jugger not had the opportunity to dosomething truly innovative and and sort of miss the mark. I mean Netflix,blockbuster, Air BNB and any major hotel chain. They could have been theones to sort of embrace the idea that...

...of Airbnb and staying in other people'shomes and have their name attached to it. But, you know, because theyhad the existing infrastructure but refused to sort of steer into that innovation.But, and you you're bringing up a really great point, because most ofus read innovator's dilemma and most of us, more importantly, prey at the productaltar that is to say, we believe, like we believe in gravity, that the best product wins. Well, the best product doesn't win. Thecompany that gets the design of the category is the company that wins.And as long as the world agrees with you about a problem and a solution, you get to dominate. So, for example, Microsoft has over ninetypercent share with Microsoft office, and Google has a product that they believe isfundamentally, and I'm going to use this word on purpose, better, andthey give that product away for free. It's a quote, better product andit's free. It's called Google Docs. And ever since the launch of GoogleDocs, you know what's happened to Microsoft Office? freaking nothing. Yeah,and so there's a dynamic at play which we could talk about if you like, Jonathan, but the reality is the company that designs the space is bestposition to dominate it. And once a category King emerges. We know becausewe did the data science research. They take two thirds of the economics andthey dominate for as long as the world agrees with them about the problem.And so if you go back to your airbnb example, what they did wasthey framed a whole new way of thinking about travel and they have a provocativepoint of view, and I think it's something like, you know, don'tgo there, stay there, and I might be getting a little bit wrong, but the point is they've changed the way we think about the experience wewant to have when we go visit a...

...city like you know, and pickyour favorite city, Paris or wherever you want to go, in a wholenew paradigm that wasn't available before. Nobody had had the Aha. And sowhen they have that AH and they educate the world, Hey, don't justgo there, stay there, have the experience of living there, and that'swhat we deliver it air BNB. They reframe the criteria by which you andI choose to travel, and and that's what category designers do as distinct frommarketers. They condition the world to think how they want the world to think, particularly about a problem and there for a solution. And when that happens, you and I stopped doing what we used to do, in this casego to hotels, and we start doing this other thing called rent somebody's floorspace. And you know, if you roll the clock back ten years,fifteen years, that was a crazy idea. Yeah, and now, of course, we know how the movie plays out. Are PNP is arguably themost important travel company in the world today and certainly one of the most valuable. Yeah, well, and I you know, I heard something weeks ago. You know, it was this joke that twenty years ago, you know, the to the two rules were, you know, don't, don't geton the Internet and don't get in cars a strangers. And twenty years later, now we get on the Internet to summon strangers to get in their carwith with APPs like Uber, you know, and and then we go, wetake we take the stranger's car to the Stranger's house and we stay inthe strangers house. Yeah, right, yeah, and so the interesting thingabout this is if you look at Air BNB and you say, well,they didn't attack an existing market category, they designed their own and they taughtyou and I to think fundamentally differently. If they had positioned themselves against hotels, I would argue to you you and I would not be talking about theirBANB MMM. And so what legendary category...

...designers do is they move the marketfrom the way it is to the way they wanted to be, and theyuse this thing called a provocative, engaging point of view to do that.And so it's insanely counterintuitive to say to see Eo, CMOS, CFOs orUfos, that what you want to do is attack a zero billion dollar marketcategory. And it's just like the old story, Jonathan, about the salesrep who shows up in some foreign country, some developing country, and it's asales rep who sell shoes, and she looks around and says nobody herewears any shoes. There's no opportunity and leans and then the next salesperson comesand says there's nobody here wearing shoes. What massive category potential. All weneed to do is teach this country about shoes. Yeah, and so that'sreally the difference. Category designers see a problem and then, of course,an opportunity for a solution in a new way that that the vast majority ofthe world doesn't and when they educate the world about both that problem the solution. But Bang are PNB shows up, Uber and lift show up and allof a sudden you and I are introduced to a whole new way of doingsomething that we had never even considered before. And what I'm saying to you,and we did the research for our book play bigger, is that's whatvirtually every legendary innovator over time. Did they didn't. They didn't market theirproduct, they marketed a problem. Yeah, and so, Christopher, it doesseem like the the path of least resistance, the easiest the easiest thingto do is to say, you know, we we already know there's a market, we've got a product, it's superior, and here is why,you know, reframing the an entire category. It just it seems like a massiveundertaking. I mean, is this something that every CMO can do?I mean, is it? Is this? Is this approachable? Is this?Is this something that can be accomplished?...

Or, you know what, ifyour product or service is extremely similar to something else that's out there?You know, I mean is is there always a way to do this,or does this sort of path only exist to a select few? So Ilove this dialog and I going to say something you know, some people mightnot love, which is most people in business all they want to do isplay the game and they never stop to look and analyze the game. Andthe reality is when you make a decision to attack an existing market, onethat particularly has a category king, and most of them do, by definition, you're fighting for twenty four percent of the economics at most. And ifyou look at a lot of categories, there is no competition of consequence.So if you look at the energy shot category, sure there's a couple ofnose picking competitors, but for our energy has it all. Why? They'rethe category designers in the space. FACEBOOK, for all practical purposes, has nocompetitor. In social networking. Sure they have competitors who compete for advertisingdollars, but when facebook started there's almost countless number of social networks and todaynobody competes with them directly. And so what I'm saying to you is thereare more and more markets that are winner and take all markets. That's thegame we're playing and competition by definition is for losers. And here's why.The minute I compete, I'm comparing myself to someone else. Pepsi will nevercatch coke, and the reason for it is psychological number one. The worldknows cokes the leader, and there's a reinforcing virtuous circle about that, becauseyou and I is human beings are pack animals, and so everybody who drinkscoke makes me feel better about drinking coke. And the second thing is, youknow Pepsi for years ran the Pepsi challenge where they told everybody Pepsi tastebetter than coke. And when, when...

...you say the World Pepsi Tastes betterthan coke, what's in the mind of the market? Coke, ha ha, ha. Right, when Richard Nixon, the unspoken often speaks more loudly thanthe spoken. Right, Johnathan. And so when Richard Nixon says I'mNotok Brook, all of America Goes Holy F and F the president's the crux. And so when we get into the stupid feature comparison and compete for marketshare, we're referencing ourselves against the leader or against the competitor. And sowhat we're saying is, compare my feature set to theirs, and if they'rethe category king, what happens? It's a race to the bottom. HMM. You have to compete on price because if there's product parity or perception,look, google crushed everybody in search. Microsoft has spent ten billion dollars onbeing ten billion dollars and nothing has happened to Google's market cap and market shareother than it continues to go up. And so what I'm saying to youis, if Microsoft, one of the most talented, technology rich, cashrich, IQ rich companies on planet earth can't unsee an existing category king witha we're better than they are strategy. What would make us think that wecould in our business? And so competition is for losers. What there isto do is design a space that you can dominate and become known as thecategory King for and if you don't do that, by definition, your loser, competing for twenty four percent of the market. Why don't think we couldend on a more powerful example than the O, then the Google, beingsort of, quote unquote competition, even though obviously doesn't sound like it's muchof much of one. So, Christopher, I think. I think this hasbeen some incredible content. I'm excited...

...to you. I'm excited to readyour book. To be honest, you know this. This has been agreat conversation for me as well. I know our listeners are going to geta lot of value out of it. And if our listeners are interested in, you know, finding more about about your podcast, that legends and loserspodcast, interested in learning more about your book or even just connecting with you, Christopher, what's the best way for them to go about doing that?It's super simple legends and LOSERSCOM and all my social you know, presences andinformation about play bigger and, obviously, episodes of the show and of legendsand losers. All that is all there. So come and visit us on legendsof loserscom fantastic, Christopher. Thank you again so much for your time. It has really been a pleasure having you on today's episode. The pleasurebeen all my Jonathan. Thank you. I, you know, love CMOS, love what you're doing with your show and it's been it's been great tobe with you. Thank you so much. To ensure that you never miss anepisode of the B Tob Growth Show, subscribe to the show and Itunes oryour favorite podcast player. This guarantees that every episode will get delivered directlyto your device. If you or someone you know would be an incredible guestfor the B tob growth show, email me at Jonathan at sweet fish Mediacom. Let us know. We love connecting with be to be executives and welove sharing their wisdom and perspective with our audience. Thank you so much forlistening. Until next time,.

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