Established companies in mature markets often have consistent brands. If you ask employees why customers buy, they give broadly the same reasons. If you ask the customers, they’ll give you something a bit less complimentary, but still relatively consistent. Market segments are well known – some buy on price, others quality, some based on status – with competitive brands differentiated in terms of positioning to capture more of certain segments. Most seasoned travelers know what to expect from a Marriott vs a Super8 motel vs the Four Seasons. Even if they were unaware of the brand, all they need to look at is the decor and marketing copy to form an opinion of who the hotel caters for. The memes that go into design elements, website copy, and advertising messaging are well optimized towards the brand’s chosen positioning.
Start-up companies in evolving markets often have inconsistent brands. If you ask employees why customers buy, they all give different reasons. If you ask the customers, they’ll pretend that it’s obvious, but perhaps privately admit that they’re a little bit confused. Most people haven't purchased from you, and they're not quite sure what you offer, or why it's better. Market segments aren’t well known – reasons to buy are fragmented – with competitive brands either copying each other or changing their website copy based on their last exciting conversation. For example Airbnb started by offering airbeds on the floor of apartments during tech conferences, and had many iterations before arriving at their current offering. The memes that go into design elements, website copy, and advertising messaging are constantly being tested, with no real consensus on what’s working or why.
This ‘memetic confusion’ is a normal part of innovation, as the rules of a market are changing, and both companies and customers are scrambling to figure out how to make sense of the chaos. Nobody knows how big the market will be, nor what the shape of the segments will look like, when the dust eventually settles and the fog of war is lifted. There are many reasons to buy (or not buy), with new unexpected use cases springing into existence, and companies are testing and learning what’s working, in order to establish eventual best practices. The emerging market collides with incumbents adding to the confusion as they first dismiss, then slowly react to the threat of new entrants.
Eventually customers will figure out their preferences, they’ll converge on shared understanding of what words mean, and what’s important when making a buying decision. Today it's widely known what to expect from an Airbnb, versus a hotel, and sole segments of the market prefer one or the other. Companies will find their ecological niche, with usually one major winner across categories, and a few smaller players hiding in smaller segments. The majority of companies won’t find a chair when the music stops, and will either get acquired by one of the winners looking to consolidate, or they will go out of business. Incumbents also adopt the language and design elements of successful startups, and the startups rediscover and converge on what worked for incumbents, for example Booking dot com adding apartment rentals to their platform, and Airbnb hosts offering amenities similar to hotels.
When you’re a start-up company operating in this sort of or environment, it’s important to find ways to cut through the memetic confusion as quickly as possible, instead of succumbing to it. Conduct a rigorous meme audit: what words, concepts, and analogies are your customers and partners using to describe you? What’s working on sales calls, and what’s popular on social media or your blog? It’s likely your Founder already has the best understanding of the meme-space, so try and extract that knowledge of what works (or doesn’t) out of their head and get it on paper.
The majority of companies fail, which means they didn’t get a single combination of memes to work. Try and dominate at least one, before you try and establish multiple ones. You’re aiming for a ‘monopoly of the mind’: you might not be the biggest in the wider market, but when someone uses that one specific term, you know you can win them over. Space in customer’s brains is limited, and they will rarely devote much time or energy to considering your product, unless the problem you solve is extremely painful to them. You have a very small window to fit your message into, so you will be very lucky to get more than one idea through. This is even more true as you expand from early adopters to the mainstream.
The more you refine your messaging, the wider share of that specific niche you can capture. If your homepage matches your advertisements, which matches your search terms, and you use all the same words in your sales calls, emails, blogs and social posts, you’ll have memetic alignment. The more clear customers are of what your positioning is, the more chance there is that they will be able to place themselves in that category, and identify others who they can refer you to. If your messaging resonates, you’re arming them with tools to make a stronger referral, which has a higher chance of succeeding. Decrease the amount of brain cycles they have to expend to decide if they want to buy or refer you, and they will buy more from you and refer you more often.
Win enough customers in this niche, and you’ll become the default choice for that group. They’ll all be talking about you and referring you to others that enter the meme-space. If the space you’re playing in is small, you have to decide whether to grow your niche by educating the market, or to jump to additional niches. Airbnb grew the segment through PR, referral incentives, and branding, but it cost a lot of VC dollars. If you expand to other niches, try and choose niches that are adjacent, so that you have some shared ties between new and existing customers, and can use social proof from your existing audience. If you decide to grow your niche, try to coin a term or pluck one from obscurity: something you can own, where competitors have less right to play, so that everyone who enters the category must refer to you.
practices evolve from novel -> emerging -> good -> best.