On Monday, Lee Frederiksen wrote a post describing how high growth firms often employ counterintuitive strategies, allowing a company like WebMD to outperform a market phenom like Google. Today, I'd like to talk about a company that has performed far better even than WebMD — a company, by the way, that is known for charting its own course and defying conventional wisdom.
Two weeks ago Apple became the second-largest company in the world by market value (behind ExxonMobil). In the three and a half years since it first introduced the iPhone, the company's stock price has tripled — an amazing achievement for a company its size.
In a recent post to the O'Reilly technology blog, entrepreneur and venture capitalist Mark Sigal discussed the way Apple approaches market segmentation from an entirely different angle than its competition:
Apple is a rare bird, pursuing non-linear, high-orchestration, high-leverage strategies…. Versus merely trying to stuff a product, burrito-style, with as many different features as possible, they target specific user experiences, and build the product around that accordingly.
Sigal explains that Apple's mobile and semi-mobile devices (such as laptops) are segmented into four categories: wearable, pocket-able, bag-able, and portable. Each of these segments maps to a different demographic, offering a clear and increasingly delicious upgrade path.
Unlike its competition, the company isn't overly concerned about market share. Google's Android platform, for instance, has overtaken the iPhone's iOS as the best-selling smartphone operating system. But Apple's laser focus on the needs and desires of their customers has rewarded the company with the lion's share of mobile phone profits. Even Apple's laptops, despite garnering only a tiny percentage of the portable computer market, are exceedingly profitable.
If there is a lesson here for professional services firms, it is this: look to your customers for inspired market strategy. The secret to your success lies with them, not in the conventional wisdom of your competitors.