Never Aim for the Middle — Wisdom from James Surowiecki

News item: Apple Sells Out iPad Pre-Order Inventory As Launch Nears.

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James Surowiecki is the author of the influential book, The Wisdom Of Crowds (one of the books I have presented at the First Friday Book Synopsis), and a regular columnist for The New Yorker.  He is an astute observer of the trends and changes in our culture.  Here’s his latest.

In a big-picture scheme of things, we have two groups that are healthy, and one that is in real trouble.  The two healthy groups are the “very best,” and the “good enough.” It is the “middle” that is in real danger.  This is the premise behind his article SOFT IN THE MIDDLE. Here’s part of his opening paragraph:

Starting at five hundred dollars, the iPad is significantly more expensive than its competitors. But Apple’s assumption is that, if the iPad is also significantly better, people will happily shell out for it (as they already do for iPods, iPhones, and Macs). That’s why when Steve Jobs first introduced the iPad he said that, if a product wasn’t “far better” than what was already out there, it had “no reason for being.

At the other end of the spectrum is the “good enough — adequate.”  Here’s a paragraph about this group:

On the contrary, companies like Ikea, H. & M., and the makers of the Flip video camera are flourishing not by selling products or services that are “far better” than anyone else’s but by selling things that aren’t bad and cost a lot less. These products are much better than the cheap stuff you used to buy at Woolworth, and they tend to be appealingly styled, but, unlike Apple, the companies aren’t trying to build the best mousetrap out there. Instead, they’re engaged in what Wired recently christened the “good-enough revolution.” For them, the key to success isn’t excellence. It’s well-priced adequacy.

And though these two examples are about different ends of the consumer world, they have something in common:

These two strategies may look completely different, but they have one crucial thing in common: they don’t target the amorphous blob of consumers who make up the middle of the market.

Surowiecki concludes with this:

According to one estimate, Nokia has nearly twenty times Apple’s market share, but the iPhone alone makes almost as much money as all Nokia’s phones combined. But making money by selling moderately good products that are moderately expensive isn’t going to get any easier, which suggests a slight rewrite of the old Highland ballad. You take the high road, and I’ll take the low road, and we’ll both be in Scotland afore the guy in the middle.

Here’s my take.  A while back, I read (and presented) the Robert Bloom book, The Inside Advantage.  In it, he spoke of the importance of these two questions

• Who is my core customer?
• What is my uncommon offering?

From the Surowiecki article, we learn that it may be much easier to answer these questions for the upper and the lower end of markets, and a whole lot harder to target the “amorphous middle.”

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