Substitutes are your real competition
This morning as I sat and ate some cereal, I read the text on the back of the box of my Raisin Nut Bran (by far my favorite cereal). On the back of the box, the text reads something like this:
“Eating breakfast gives you the energy that you need to have a productive day. So stop hitting the snooze button and make time for breakfast.”
This simple statement says a lot about how General Mills thinks about their product and how it relates to their real competition. General Mills realizes that their biggest competition is not other cereals or even other breakfast foods. Their real competition are those people that don’t make enough time for breakfast (those who substitute sleep for breakfast). The best thing that General Mills could do to increase sales of their product is to find a way to get people out of bed in the morning rather than hit the snooze button. In fact, I’d go so far as to say that GM should partner with alarm clock manufacturers like Bose and strike some radio programming deals that help people get out of bed.
As I mapped this way of thinking onto MyPunchbowl, one substitute is probably “paper and pencil”. It’s certainly possible to plan out your entire event using paper and pencil (and lots of people still do it this way). However, it’s not as efficient, it will take more time, and I would argue that you will have a less successful event (for example, when you use MyPunchbowl’s Pick-a-Date feature you can ensure the key people will be at your event). One other potential substitute is other forms of celebration (like vacations). For example, my sister-in-law recently told me that they are going to take a trip this year instead of holding a birthday party for my nephew. If somehow we could convince people that hosting a party or event was the best way to celebrate a birthday, our traffic would likely go up significantly.
Think about your product in this light: rather than focusing on other companies who are competing for the same market space, think about the substitute for your product. What substitute is the real competition for your product?
July 2nd, 2008 at 12:51 am
We talk about this notion of substitutes all the time within our team.
One thing you might also want to consider for My Punchbowl.
The real substitute for you may not be paper and pencil — but inertia. People may *want* to be more social, invite friends over more often, host parties, etc. But they don’t (for any number of reasons). Just like breakfast cereals have the snooze button as a substitute (not just other breakfast foods), you may want to think about what people do *instead* of being social and hosting events which likely make them happier.
It’s late. Just thinking out loud. Feel free to ignore.
July 2nd, 2008 at 11:36 am
Dharmesh,
You’re right– I think I came closer with my mention that some people might choose to go on a vacation rather than throw a party. It’s possible that what people do instead is simply “nothing” in which case we need to find a way to convince people that throwing a party will be such a joy and a lasting memory so much so that it is “worth it.” Interesting food for thought.