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How to define and dominate your billion dollar category
Mark Organ, CEO @ Influitive
@markorgan
@influitive
PLAY BY YOUR OWN RULES
TAKE A NEW ROAD
Company
CategoryCloud-based
Marketing AutomationAdvocate Marketing
Founded Jan 2000 Oct 2010
Exit Nasdaq IPOORCL TBD
Value $871M TBD -- $B
WHAT IS A
CATEGORY?
a transformational experience
+
driven by disruptive forces
MY DEFINITION OF A CATEGORY:
For a distinct segment of the market,
A revolutionary business model
Green-conscious, technophile early adopter car enthusiasts
All-electric drive with equivalent/superior performance to BMW
7-series/Benz S-class
• Custom car ordering online, direct
• Supercharging / battery switching stations
• Continuous deployment of upgrades
• Lithium-ion battery innovation
• Cloud computing
TESLA: Electric high-performance luxury cars
2010-2013
High-growth, cash-strapped B2B companies largely in Bay Area
Acquire and deploy good-enough CRM successfully in days instead of years
• Monthly subscription by user
• Continuous deployment of upgrades centrally for all customers
Cloud / internet delivered software
SALESFORCE.COM: Cloud CRM, 1999-2004
Process and lead-gen oriented (demand gen) B2B marketers
Automatically nurture prospects, guided by their behavior, until sales-ready
• Monthly subscription, scaled by user
• Continuous deployment of upgrades centrally for all customers
• Cloud-delivered software
• Automated filtering of phone and mail
ELOQUA: Cloud marketing automation 2005-
2013
Advocate marketers and the advocates they serve
Advocate-centered, comprehensive and self-service experience
• Monthly subscription, scaled by advocate activity
• Continuous deployment of upgrades centrally for all customers
Pervasive social web
INFLUITIVE: Advocate marketing platform
2010-2???
WHY WOULD YOU WANT TO BUILD A NEW CATEGORY?
Revenue growth (2004-2005)
Note: Relative Market Share is each company’s revenue divided by the market leader; the market leader’s revenue is divided by the 2nd place company’s revenue; Precise revenue not available for Upshot and Salesnet, figures represent approximate revenue and growth estimatesSource: Gartner (http://www.gartner.com/newsroom/id/493005)
-40%
-20%
0%
20%
40%
60%
80%
100%
0 0.5 1 1.5 2
Salesforce.com
Oracle(incl. PeopleSoft)
SAP
Siebel
Amdocs
Upshot
Salesnet
Relative market share
Salesforce.com’s status
as a category creator
enabled rapid growth
several years ago
-10%
0%
10%
20%
30%
40%
50%
60%
70%
0.00 0.20 0.40 0.60 0.80 1.00 1.20
Salesforce.com
Oracle
SAP
Microsoft
IBM
SugarCRM
Revenue growth (2011-2012)
Note: Relative Market Share is each company’s revenue divided by the market leader; the market leader’s revenue is divided by the 2nd place company’s revenue. Source: Gartner (http://www.gartner.com/newsroom/id/2459015)
Relative market share
This led to a dominant
market position today
US unit sales 2013
Source: Business Insider (http://www.businessinsider.com/tesla-is-not-really-outselling-bmw-audi-2013-5)
0
50
100
150
200
250
300
350
Tesla Audi Cadillac Lexus BMW Mercedes-Benz
Tesla currently has tiny share vs. all luxury vehicles – similar
to salesforce.com’s broader CRM broader market in 2002
0
2
4
6
8
10
12
14
16
18
20
PorschePanamera
Audi A8 Lexus LS BMW 7-series
MB S-class Telsa ModelS
BUT Tesla is now dominant in the space closer to its
category of all-electric luxury high-performance sedans
US unit sales 2013
Source: Business Insider (http://www.businessinsider.com/tesla-is-not-really-outselling-bmw-audi-2013-5)
$1,630K
$35K $33K $10K $9K $6K $0K $0K
$200K
$400K
$600K
$800K
$1,000K
$1,200K
$1,400K
$1,600K
$1,800K
Tesla BMWGroup
DaimlerAG
VW Ford GM
* Fisker filed for chapter 11 protection in Nov 2013Source: Yahoo! Finance, Corporate filings, Analyst reports; Market caps are USD & as at Oct 2014
Fisker*
Tesla’s category creator status and rapid growth drive
valuation multiplies far higher than other carmakers
Market capitalization / global 2013 unit sales
$3.40
$5.60
$1.20 $0
$1
$2
$3
$4
$5
$6
Overall (20) Category Creators (10)Non-Category Creators (10)
CNN/Fortune top 20 fastest growing companies (2010)
Category creator premium
Category creators enjoy nearly a 5X valuation premium
on revenue growth!
Incremental market cap per $1 of additional revenue
Source: Cambridge Partners in HBR Blog, 09/2011
WHERE DO
NEW CATEGORIESCOME FROM?
VS
Category creators have missionary zeal about their category vision, not
just their company vision.
MISSIONARY MERCENARY
THE 6 RULESOF CATEGORY CREATOR GO-TO-
MARKET
MARKET THE CATEGORY1
Tesla
Salesforce.com
Software-as-a-Service
Electric car
Source: http://www.google.com/trends/
1
1
Tesla
Salesforce.com
Software-as-a-service
Electric car
Period in which interest in the category
tracks with interest in the category creator
Source: http://www.google.com/trends/
1
Tesla
Salesforce.com
Software-as-a-service
Electric car
Period in which interest in
the category creator far
outstrips interest in the
category
Source: http://www.google.com/trends/
1Do not call yourself the leader in your category.
That is the job for your advocates, not your marketing department.
(NOT INFLUITIVE)
ELEVATE THE UNDER-SERVED MISSIONARY2
Advocate Marketing:
CREATE POWERFUL WORD OF MOUTH3
4Influencer Marketing:
LEVERAGE INFLUENCERS TO RECOGNIZE THE
CATEGORY
Community Marketing:
ENABLE PRACTITIONERS TO CO-OWN THE CATEGORY5
Category Creator Biz Dev:
INTEGRATED PARTNERS TRANSFORMATIONAL
EXPERIENCE6
NEW CATEGORIES ARE BUILT ON TOP OF DISRUPTIVE
TECHNOLOGY
BLOCKCHAIN
How to define and dominate your billion dollar category
Mark Organ, CEO @ Influitive
@markorgan
@influitive
PLAY BY YOUR OWN RULES