Law #3: The Law of the Mind
The Law of the Mind says it is better to be first in the mind than first in the marketplace.
To be honest, this is not my favorite chapter of the book. The concept of "mindshare" is important, but I don't think Ries and Trout make the point very clearly.
And as long as I'm giving unsolicited advice to marketing legends, let's remove the word "immutable" from the title of this book, okay? How can laws be immutable when there are so many exceptions?
Law #1 says that it is better to be first than it is to be better. Law #3 says that it is better to be first only if doing so is the way to gaining significant mindshare.
Not too far in the future, Tivo will be the perfect example of an exception to both of these laws. They were first in the market. Furthermore, they have enormous mindshare. The Tivo name is like Kleenex. Even though my digital video recorder is not really a Tivo, I still call it one. With that kind of mindshare, and having been first in the market, laws 1 and 3 say that Tivo should be dominant and should stay that way for a long time.
But Tivo will lose. It is important to understand these marketing laws, but they are not immutable.
Problems in Measuring Mindshare
Our industry seems to spend a lot of its time either underestimating or overestimating the power and value of mindshare:
- We underestimate the value of mindshare when we try to change the minds of
people. Ries and Trout say that "The single most wasteful thing you can
do in marketing is to change a mind." I would love to know how much it
will eventually cost to convince the world's VB6 programmers to move to
VB.NET. The audacity of this move is simply amazing. For any other
company in the history of the earth, it would be suicide to try and change the
minds of several million of your own customers.
- We tend to overestimate the value of mindshare as well. During the dotcom bubble, venture capitalists sacrificed several billion dollars on the altar of Law #3. Mindshare was sought and purchased at unbelievable premiums. In hindsight, it seems apparent that mindshare which was quickly gained can be quickly lost.
The problem here is that we talk about customer minds without reminding ourselves that not all of those minds think the same way. Remember the marketing bell curve? Changing the mind of an early adopter is cheap and easy. Changing the mind of a conservative or a laggard is expensive and hard. These differences cause us to either overestimate or underestimate the value of mindshare:
- If most of your mindshare inventory is in early adopters, you are in
trouble. Early adopters don't stay anywhere very long. Eventually,
you will lose most of them.
- Your valuable mindshare is among conservatives. It will be very
expensive for anyone who wants to take these people away from you.
- If you are a new player trying to gain mindshare, don't be afraid to steal early adopters from your competitor. It's easier than you think. Just remember that the next guy is going to steal them from you.
This is why Tivo will lose. They built enormous mindshare among the early adopters, but never really made it into the mainstream markets of the pragmatists and conservatives. In the end, Tivo will end up in the same place as the dotcoms, at the bottom of the chasm.