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, Kno and love your brand start a podcast,invite your industries thought leaders to be guess on your show and startreaping the benefits of having a network full of industry. influencerslearn more at sweetfish media dotcom, you'R. Listening to the B TB Groth showpodcast dedicated to helping B to b executives, achief explosive grown whenyou're looking for techniques and strategies, tools and resources. You'vecome to the right place. I'm Jonathan Green, I'm James Carbury. Let's getinto the show, welcome back to the B to B Gros showtoday we are joined by Christopher lockhead. Christopher is a three timeSiligon Valleycmo he is the host of the legends and Moozers codcast and thecoauther of a new book play bigger, Christopher Welcome to the ShellJonathan, I'm so glad to be with you. Thank you for having me it's a pleasureto have you here I mean you'r. your resume is incredibly impressive. I'mexcited to sort of dive into today's topic. We're going to be talking aboutthe marketing mistake that almost every C mo makes, and if there is someone outthere who knows what this mistake is. It would definitely be a three time.Silichon valley see him ow, such as yourself, but before we do getintoday's topic, I love for you to sort of tell our listeners a little aboutyourself and Kindaf what you're up to these days. Well, as you mentioned, I'ma formor three time public company CMO and Silicon Valley. Today I live nottoo far from Silicon Valley and a beautiful beach town called Santa Cruz,California and Um. I retired, shortly after h after thebook play, bigger, came out and took some time off really trying to thinkabout what I wanted to do, and here was the big. The sort of a couple of thingscame together. Jonathan one was at the time play bigger was coming out. Therewas a story in the Wall Street Journal...

...that that stopped me in my tracks. Theyhadline on the story. He said the crisis, an American encrprenorship andI thought Chrisis in American Oersh. What are you talking about? Everybodyand their brothers, an onchepetor being you know in Silicon Valley, and itturns out that's completely wrong and Um. We are at the lowest level ofentrprenorship in American history and more companies die in our country everyweek that are created, wow and Um. You know that's not, okay with me, becauseI think Um entremeners build our country in our world and I'm also somebody Jonathan for whomenrpenorship is not a theoretical discussion. kN Wen an archponter rises up or brings themselves up, theycan bring up a whole community or a whole neighborhood or a whole familyand and so enchrpenorship for me was a way out and Um. You know it. It breaks my heart that Mtdoes not happenanymore, and the reality is every product service or renovationthat you and I love exist because a legendaryenchpener got product company in category rightat the right time, and so um I've decided to dedicate the back half of mylife to trying to stow contrapetership and help entprenrs and etrpenriolcompanies um be even more successful, Yo well and that's Fantascic, and Iknow we do have plenty of entrbreneurs sort of in our audience, which is whichis great. So I think that idea speak to them. You know I, I myself am sort ofpart of the a smaller start up company that that's that's grown throughinnovation, which is fantastic, but it is a struggle I mean you do see thatthere are so many companies that fail all the time. You know there is adesire to be in Auchrprenour, but I think it's fantastic what you doin,encouraging that making sure that that idea, those ideals persist...

...because it can be very difficult, socudos to you for for doing that, thats fantastic! Also. You had mentionedSanta Cruz, the beach down in California. I'm from San Diego myselfand have actually had the opportunity to do a little wine tasting up inSaanta Cruz, which some people don't know. It's a fantastic place also for Hfor wine tasing, which is which is great so yeah we kindo have it all here.You knowwe got a great beer scene. As you mentioned, we have a lot of greatwinteries in the Santa Cruz Mountains and obviously this is a wonderful youknow: Classic California, Beach, towne yeah and, I think, served as theinspiration to the nineteen eightyes ish H, horror, movie, the Lost Boys,I'm not Unddestan on that, but that's absolutely right right and I think Ithink they're getting ready to film. I want to say it's the new transformersmovies here here, because ah one of my next door, neighbors kids WHO's aboutsixteen is is- was trying to figure out how to be an Xtra in the movie, becauseI think they're going to shoot a scene on the boardwalk o Wow baserat that'. Ilove that so Christopher. Let's, let's get into today's topic, it's a it's abit of a mystery for me. We had exchanged a few emails back and forth,but we kind of laughed it off a bit ambiguous, but we are going to betalking about this idea. The marketing mistake that almost every CMO makes soChrisrum. You know I'm I'm as much in the dark now as as our listeners armgoing to. Let you take it away. Thank you. So the mistake that many of usmake in business is we make an unquestioned, unexamined unconsciousdecision to position ourselves or that is to say,attack a market when we launch Yiuto Product Company Service Por Brand in anexisting category, and what we do is we get we've beentrained that what there is to do is go after a large market category with ameaningully, better product and the...

...other unconscious choice we make inthis whole paradime is we make a choice to compete and many businessbooks we've read areall about how to how to compete and win mm. Well, it turns out to Jonathan thatthat's not what legendary innovators do. Legendary innovators. As a matter offact, many of them refuse to have their innovation compared to anything theywant to be considered the first. They want everything else to be compared tothem. They want the world to believe that before their new carbod ingulator,the world was a up one way and now it's a whole new way, and so there's abefore n and after Steve Jobs did not compare the eyphone to the blackberry.That's not what happened. You know. Henry Ford did not compare hisinnovation to anything that came before and neither did Sera blakely with spaks.She didn't call it a girdle to data, 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 was to the wayyou want it to be, and that's how you get netflicks and a and blockbustergoing bankrupt, and that's how you get whole new categores. You know like wesee almost everyday now, particularly in the technology industry, yeah yea.Well, A- and you know it does seem you you had mentioned Netflix and andblockbuster. You know it's it's. You do see these categories. Where were anexisting jug or not had the opportunity to do something, truly innovative andand sort of missed the mark. I mean Netflix Blockbuster Arban B and any major hotel ce. Theycould have been the ones to sort of...

...embrace the idea, that of arb an B andstaying in in other people's homes and have their name attached to it. But youknow 'cause. They had the existing infrastructure, but refused to sort ofsteer into that innovation and you're you're, bringing up a really greatpoint, because most of us read innovators, dilemma and most of usmore importantly, prey at the product altar. That is tosay, 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, andas long as the world agrees with you about a problem in a solution you get to dominate. So, for example,Microsoft has over ninety percent share with Microsoft office and Google has a product that theybelieve is fundamentally and I'm going O use. This word on purpose better andthey give that product away for free, it's a quote better product and it'sfree. It's called Google docks and ever since the launch of Google Docks, youknow, what's happened to Microsoft office, frigking, nothing and so there's a dynamicat play whichwe could talk about. If you like Jonathan, but the reality is thecompany that designs the space, his best position to dominate it and once acategory King Omerges, we know ecause, we did the data science research, theytake two thirds of the economics and they dominate for as long as the worldagrees with them about the problem. And so, if you go back to yourarbndbexample, what they did was they framed a whole new way of thinking abouttravel and they have a provocative point of view, and I I think it'ssomething like you know: Don't go there stay there and I might be getting alittle bit wrong, but the point is they've they've changed the way wethink about the experience we want to...

...have when we go visit. A A city likeyou know, pick your favorite city, Paris or wherever you want to go in awhole new paradime that wasn't available before nobody had had the Aha,and so when they have that. Aha, they educate the world, Hey d, don't just gothere stay there, have the experience of living there and that's what wedeliver it. R BNB they refre the Crigeria by which you and I choose totravel and and that's what category designers do as distinct from marketers.They condition the world to think how they want the world to thinkparticularly about a problem and therefor a solution, and when thathappens, you and I stop doing what we used to do in this case, go to hotelsand we start doing this. Other thing called rent somebody's floorspace, andyou know if you roll the clock back ten years fifteen years. That was a crazy idea. Y and now, ofcourse, we know how the movie plays out R PN P is arguably the most importanttravel 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- and it was thisjoke that twenty years ago, yo o the two, the two roles were, you know,don't don't get on the Internet and and don't get in cars of strangers. Andtwenty years later now we get on the Internet to summon strangers to get intheir car with with APS like Oover, you know and A and we go. We take. We takethe stranger's car to the stranger's house, nstay in the stranger's, Hout,right, yeah and so th. The interesting thing about this is: If you look at rband B- and you say well, they didn't attack an existing market category,they designed their own and they taught you and I to think fundamentallydifferently. If they had positioned themselves against hotels, I would argue to you you and I wouldnot be talking about Carbian B MHM and...

...so what legendary category designers dois they move the market from the way it is to the way they wantit to be andthey use. This thing called the provocative and engaging point of viewto do that, and so it's insanely counter indtuitive to say: Th, CEO,CMOS, U Ow, CFOs or Ufo that what you want to do is attack a zero billiondollar market category. And it's just like the old story, Jonathan about thesales rap who shows up in some foreign country, some developing country andit's sales rep who sells shoes and she looks around and says nobody here wearsany shoes, there's no opportunity at Leanh and then the next salespersoncomes and says: There's nobody here wearing shoes. What massive categorypotential all we need to do is teach this country about shoes, and so that'sreally the difference. Category designers see a problem and then, ofcourse, an opportunity for a solution in a new way that that the vastmajority of the world doesn't on when they educate the world about both thatproblem in the solution. Bebang Air PNB shows up, Ooberand, lift, show up andall of a sudden, you and I are introduced a whole new way of doingsomething that we had never even considered before, and what I'm sayingto you- and we did the research for our book play bigger, is that's what virtually every legendaryinnovator over time did they didn't? They didn't market theirproduct, they marketed a problem. Yeah and soChrisoper does seem like the the path of least resistance. The easiest, theeasiest thing to 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 anentire category it just. It seems like a massive undertaking. I mean, isn'tthis something that every CMO can do I mean? Is it is this? Is this...

...approach ables? This? Is this somethingthat can be accomplished or you know what, if your product or service is extremely similar to something else,that's out there. You know I mean, is there always a way to do this, or doesthis sort of path only exists to a select view? So I love this dialogueand I got to say something: You know some people might not love, which is most people in business. All they wantto do is play the game and they never stopp to look andanalyze the game, and the reality is when you make adecision to attack an existing market, one that particularly has a categoryking and most of them do by definition, you're fighting fortwenty four percent of the economics at most. And if you look in a lot ofcategories, there is no competition of consequence. So if you look at theenergy shot, category sure there's a couple of nosepicking competitors, butfour hour energy. Has It all why they're the category designers of thespace, facebook for all practical purposes, has no competitor in social H,networking sure they have competitors who could pete for advertising dollars,but when facebooks started, there's almost countless number of socialnetworks and today nobody competes with them directly, and so what I'm sayingto you is there are more and more markets that are winter, take allmarkets, that's the game. We're playing and competition by definition is for losersand here's why the minute I compete, I'm comparing myself to someone else.Pepsi Will Never Catch Cook and the reason for it is psychological numberone. The world knows: coaxes the leader and there's a reinforcing virtuouscircle about that, because you and I is, human beings- are pack animals, and soeverybody who drinks coke makes me feel better. AOUT drinking coke and thesecond thing is, you know: Pepsi for years ran the Pepsi challenge wherethey told Everybody Pepsi, taste better...

...than coke, and when, when you say theWorld Pepsi Tastes better than coke, what's in the mind of the market, Coke right when, when Richard Nixin, theunspoken often speaks more loudly than the spoken right, Jona then, and so on.Richard Nixon says I am not a brook. All of America Goes Holy F, NF, thepresident, a Cru, and so when we get into these stupidfeature, comparison and compete for marketshare were referencing ourselvesagainst the leader or against a competitor, and so what we're saying iscompare my feature set to theirs and if they're the category Ki, what happens?It's a race to the bottom mm. You have to compete on price because if there'sproduct pparoty or perception look google crushed everybody in search.Microsoft, Hav spent ten billion dollars on being ten billion dollars,and nothing has happened to Google's market cap and marketshare other thanit continues to go up. And so what I'm saying to you is ifmicrosovt, one of the most talented technology, rich cash, Rich Ito, richcompanies on planet Earth can't unseat an existing category king with it we'rebetter than they are strategy. What would make us think that we could inour business and so competition as for losers? What there is to do is design aspace that you can dominate and become known as the category King for and, ifyou don't do that by definition, you're a loser competing for twenty fourpercent of the market, Eli, don't think we could end on a morepowerful example than the th, the Google being sort of quote unquotecompetition, even though obviously t doesn't sound like it's much much ofone so Chrisopher. I think I think this has been some incredible content. I'n'texcited to I'm excited to to read your...

...book. To be honest, you know this. Thishas been a great conversation for me as well. I know our listeners are going toget a lot of value out of it and if our listeners are interested- and you knowfinding more about about your your podcast- that legends and loses with Pocast interested in learning more about your book or or even just connectingwith you Christopher, what's the best way for them to go about doing that,it's supersumple legends, losers, dotcom and all my social. You knowpresences and information about play, bigger and obviously episodes of theshow and legends and losers, all o. That is all there so come and visit usan leges, loseres dotcom, fantastic, a Christopher! Thank you againt! So muchfor your time. It has really been a pleasure having you on today's Epsode,the pleasure of en all mine. Jonathan. Thank you. I you know, loves BMOS love.What you're doing with your show- and it's been it's been great to be withyou. Hang you so much to ensure that you never miss anepisode of the btbe growth show subscribe to the show in Itunes or yourfavorite pot cass player. This guarantees that every episode will getdelivered directly to your device. If you ar someone, you know, would be anincredible guess for the B to B Groshel email me at Jonathan at sweetfish mediadtcom, let us know we love connecting witd bee to be executives nd. We lovesharing their wisdom and perspective with our audience. Thank you so muchfor listening until next time.

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