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One of the ways in which new categories spawn
is to look for simple features which are asked by evolving customers that don't fall in the incumbents product vision
It’s incredible how entire product categories have arisen because of a simple feature lacking in all the incumbents products. The need for the feature ofcourse is caused by a larger ongoing phenomenon gathering steam.
I personally saw this happening with the movement around Account Based Marketing or ABM software sometime around 2015. At its core, ABM software was targeted around companies that were selling some form of complex sales so that the buying process included more than one persona. Think of a company selling Applicant Tracking Systems, the buyer might be Director of Recruiting, but it might require buy-in from users (junior and senior recruiters), VP HR, Procurement, IT and in some cases hiring managers (like the CTO). This would also mean that sales and marketing were more closely coupled because deals would remain in the funnel for longer and marketing had to work closely with sales in pushing it down.
CRM systems (like Hubspot) until then were based around “leads”. The core of ABM software was very simple: Let’s connect all the leads that come from the same account.
This would pave the way to build workflows (knowledge base + mixmax kinda capabilities) or analytics (like say account scoring instead of lead scoring) on top. It might not be a crazy thought to think that the entire ABM movement (from a product perspective) was because existing players didn’t allow for lead to account matching. I later saw similar things happening around the CI/CD landscape and now around video conferencing over the past year.
Interestingly, when this happens, instead of taking the incumbents head-on, the typical strategy seems to be to play nice and become an add-on to the incumbent or a larger ecosystem partner. A lot of ABM tools sit on top of Salesforce or Marketo or Hubspot etc
Not too simple..
However it’s important to note that the feature lacking is more than a mere feature which can be replicated, but instead is a core philosophical / product vision difference.
Otherwise what’s stopping the incumbents from including it in their next roadmap as they see enough traction. And before someone points this out, I’ll also say that not all incumbents are salesforce or google, and in cases where the incumbent itself is ~$100M in ARR, this could be a real threat.
An example from the HR world is when MyNoticePeriod rebranded as Hiree (run by a gritty entrepreneur) quickly grew to $1M+ revenue, Naukri simply added a feature that allows candidates to highlight their notice period while submitting their applications.