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 several thought 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 the benefits of having a network full of industry influencers? Learn more at sweet fish Mediacom. You're listening to the B to be growth show, a podcast dedicated to helping be to be executives achieve explosive growth. What you're looking for techniques and strategies or tools and resources? You've come to the right place. I'm Jonathan Green and I'm James Carberry. Let's get it into the show. Welcome back 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 of the legends and losers PODCAST AND THE CO author of a new book. Play bigger, Christopher. Welcome to the show, Jonathan. I'm so glad to be with you. Thank you for having me. It's a pleasure to have you here. I mean you're your resume is an incredibly impressive I'm excited to sort of dive into today's topic. We're going to be talking about the marketing mistake that almost every CMO makes, and if there is someone out there who knows what this mistake is, it would definitely be a three time Silicon Valley CMO 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 and kind of what you're up to these days. Well, as you mentioned, I'm a former three time public company CMO in Silicon Valley. Today I live not 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 came together, 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 my tracks. The headline of the story said the crisis in American entrepreneurship and I thought, crisis in American entrepreneurship, what are you talking about? Everybody in their brothers and entrepreneur being, you know, in Silicon Valley. And it turns out that's completely wrong and we are at the lowest level of entrepreneurship in American 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 entrepreneurs build 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 brings themself up, they can bring up a whole community or a whole neighborhood or a whole family and and so entrepreneurship for me was a way out and you know, it breaks my heart that that's not happening more. And the reality is every product, service or innovation that you and I love exists because a 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 to stoke 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 entrepreneurs sort of in our audience, which is, which is great. So I think that idea speaks to them. You know, I I myself a sort of part of a smaller startup company that's that's grown through innovation, which is fantastic, 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're doing 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 down Californ him from San Diego myself and have actually had the opportunity to do a little wine tasting up in Santa Cruz, which some people don't know. It's a fantastic place also for for wine tasting, which is which is great. So yeah, we kind of have it all here, you know, right we got a great beer scene, as you mentioned, we have a lot of 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 as the inspiration to the SSH horror movie the lost boys. I'm not a hundred percent on that, but that's absolutely right. Okay, absolutely right, and I think. I think they're getting ready to film. I want to say it's the new transformers movies here here, because one of my next door neighbors kids, WHO's about sixteen, is was trying to figure out how to be be an extra in the movie, because I think they're going to shoot a 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 a bit of a mystery for me. We had exchanged a few emails back and forth, but we kind of left it off a bit ambiguous. But we are going to be talking about this idea, the marketing mistake that almost every CMO makes. So, Chris Rom you know I'm as much in the dark now as our listeners. I'm going to let you take it away. Thank you. So the mistake that many of us make in business is we make an unquestioned, unexamined, unconscious decision to position ourselves, or that is to say, attack a market when we launch a new product, company, service or brand in an existing category, and what we do is we get we've been trained that what there is to do is go after a large market category with a meaningfully better product. And the...

...other unconscious choice we make in this whole paradigm is we make a choice to compete. And many business books we've read or all about how how to compete and win. HMM. Well, it turns out, Jonathan, that that's not what legendary innovators do. Legendary innovators is a matter of fact. Many of them refuse to have their innovation compared to anything. They want to be considered the first. They want everything else to be compared to them. They want the world to believe that before their new carbondingulator, the world was a one way and now it's a whole new way, and so there's a before it and after. Steve Jobs did not 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, and neither 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 the world 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 way you want it to be, and that's how you get Netflix and ban and and blockbuster going bankrupt, and that's how you get whole new categories, you know, like we see almost every day now, particularly in the technology industry. Yeah, yeah, well, and and you know, it does seem you had mentioned Netflix and blockbuster. You know, it's you do see these categories where where an existing jugger not had the opportunity to do something truly innovative and and sort of miss the mark. I mean Netflix, blockbuster, Air BNB and any major hotel chain. They could have been the ones to sort of embrace the idea that...

...of Airbnb and staying in other people's homes and have their name attached to it. But, you know, because they had 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 of us read innovator's dilemma and most of us, more importantly, prey at the product altar that is to say, we believe, like we believe in gravity, that the best product wins. Well, the best product doesn't win. The company 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 ninety percent share with Microsoft office, and Google has a product that they believe is fundamentally, and I'm going to use this word on purpose, better, and they give that product away for free. It's a quote, better product and it's free. It's called Google Docs. And ever since the launch of Google Docs, 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 best position to dominate it. And once a category King emerges. We know because we did the data science research. They take two thirds of the economics and they 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 was they framed a whole new way of thinking about travel and they have a provocative point of view, and I think it's something like, you know, don't go 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 we want to have when we go visit a...

...city like you know, and pick your favorite city, Paris or wherever you want to go, in a whole new paradigm that wasn't available before. Nobody had had the Aha. And so when they have that AH and they educate the world, Hey, don't just go there, stay there, have the experience of living there, and that's what we deliver it air BNB. They reframe the criteria by which you and I choose to travel, and and that's what category designers do as distinct from marketers. 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 case go to hotels, and we start doing this other thing called rent somebody's floor space. 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 the most 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 get on 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 car with with APPs like Uber, you know, and and then we go, we take we take the stranger's car to the Stranger's house and we stay in the strangers house. Yeah, right, yeah, and so the interesting thing about 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 taught you 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 their BANB MMM. And so what legendary category...

...designers do is they move the market from the way it is to the way they wanted to be, and they use 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 or Ufos, that what you want to do is attack a zero billion dollar market category. And it's just like the old story, Jonathan, about the sales rep who shows up in some foreign country, some developing country, and it's a sales rep who sell shoes, and she looks around and says nobody here wears any shoes. There's no opportunity and leans and then the next salesperson comes and says there's nobody here wearing shoes. What massive category potential. All we need to do is teach this country about shoes. Yeah, and so that's really 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 of the 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 all of a sudden you and I are introduced to a whole new way of doing something 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 what virtually every legendary innovator over time. Did they didn't. They didn't market their product, they marketed a problem. Yeah, and so, Christopher, it does seem like the the path of least resistance, the easiest the easiest 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 an entire category. It just it seems like a massive undertaking. 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, if your 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 I love this dialog and I going to say something you know, some people might not love, which is most people in business all they want to do is play the game and they never stop to look and analyze the game. And the reality is when you make a decision to attack an existing market, one that 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 if you 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 of nose picking competitors, but for our energy has it all. Why? They're the category designers in the space. FACEBOOK, for all practical purposes, has no competitor. In social networking. Sure they have competitors who compete for advertising dollars, but when facebook started there's almost countless number of social networks and today nobody competes with them directly. And so what I'm saying to you is there are more and more markets that are winner and take all markets. That's the game 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 never catch coke, and the reason for it is psychological number one. The world knows cokes the leader, and there's a reinforcing virtuous circle about that, because you and I is human beings are pack animals, and so everybody who drinks coke makes me feel better about drinking coke. And the second thing is, you know Pepsi for years ran the Pepsi challenge where they told everybody Pepsi taste better than coke. And when, when...

...you say the World Pepsi Tastes better than coke, what's in the mind of the market? Coke, ha ha, ha. Right, when Richard Nixon, the unspoken often speaks more loudly than the spoken. Right, Johnathan. And so when Richard Nixon says I'm Notok 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 market share, we're referencing ourselves against the leader or against the competitor. And so what we're saying is, compare my feature set to theirs, and if they're the 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 on being ten billion dollars and nothing has happened to Google's market cap and market share other than it continues to go up. And so what I'm saying to you is, if Microsoft, one of the most talented, technology rich, cash rich, IQ rich companies on planet earth can't unsee an existing category king with a we're better than they are strategy. What would make us think that we could in our business? And so competition is for losers. What there is to do is design a space that you can dominate and become known as the category 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 could end on a more powerful example than the O, then the Google, being sort of, quote unquote competition, even though obviously doesn't sound like it's much of much of one. So, Christopher, I think. I think this has been some incredible content. I'm excited...

...to you. I'm excited to read your book. To be honest, you know this. This has been a great conversation for me as well. I know our listeners are going to get a lot of value out of it. And if our listeners are interested in, you know, finding more about about your podcast, that legends and losers podcast, 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 and information about play bigger and, obviously, episodes of the show and of legends and losers. All that is all there. So come and visit us on legends of loserscom fantastic, Christopher. Thank you again so much for your time. It has really been a pleasure having you on today's episode. The pleasure been 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 to be with you. Thank you so much. To ensure that you never miss an episode of the B Tob Growth Show, subscribe to the show and Itunes or your favorite podcast player. This guarantees that every episode will get delivered directly to your device. If you or someone you know would be an incredible guest for 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 we love sharing their wisdom and perspective with our audience. Thank you so much for listening. Until next time,.

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