Introducing Section Two: Optimality
A preview of chapters 4 through 6 - Disruption, Superiority, and Humility
Even if you’re not a parent, it’s obvious that standing around any longer than necessary with a wet diaper in your hand isn’t just suboptimal. It’s gross.
You might ask yourself, “How fast can I get rid of this soiled diaper while changing the baby in the least amount of time?”
As fathers, when it was time to change a diaper, especially with Arik’s first child, we would always try to optimize how quickly we could do the job without sacrificing the quality of the result. We tried different approaches until we found one that didn’t even require letting the kid’s body touch the changing table. We felt like a NASCAR pit crew, rolling out of the men’s restroom with a clean baby in under 30 seconds. But we knew this approach would never work for a truly soiled diaper.
New businesses are like new babies. Just as nobody likes changing dirty diapers, few are attracted to your underperforming new offer. In an established company, such underperformance of an offer is unthinkable by management. They wouldn’t even want to give it away for free!
But as you improve, the market notices how adorable your offer is becoming. As your offer matures, you reach a point where everyone admires it, and you grow confident in the superiority of its performance and value. You forget all about the early days when your infant offer needed all the help it could get.
The initial underperformance of your offer is the starting point of Optimality, the second phase of the Insights-to-Action Supercycle.
Optimality crafts strategies from the strategic intelligence outputs of Discovery into operating models and offers driven by market intelligence. This is the evolutionary process of aligning an offer with the superiority criteria of your chosen market segments.
When you start out, you might think you understand your landscape and the array of options you might try pretty well. But you won’t know exactly how to optimize the best offer for each segment in that landscape. Your initial offer will be unwanted because its performance isn’t anything special. Your cost structure to produce an offer that will find a segment in which it can succeed is largely unknown.
The next section of this book — which covers Disruption, Superiority, and Humility — addresses how to reach your Investment Grade Conjecture (IGC). We define the IGC as the pathway you’re willing to pursue single-mindedly, invest in to grow to scale, and convince others to buy into. Your IGC represents choosing superiority, since it is selected through the intentional sacrifice of all other potential paths forward. Supporting the IGC means that you believe it has the best odds of producing superior results compared to the other options before you.
Once you’ve developed the offer represented by your IGC, you will be ready to move on to the third and final stage of the Supercycle — Simulation. Simulation is where we test the offer’s superiority against functional equivalents and competing offers to reveal how helpful and hostile stakeholders might respond. But first you must choose superiority by making your offer irresistible to the market segments you wish to make your own.
There are only four generic growth curves available for optimization. Together, they make up a system we call Angles of Attack.
Angles of Attack enables the visualization of the trends driving the evolution of businesses and their product and service offers in your industry arena. The slope of the angle changes depending on the stage of the curve the offer is at in its lifecycle. This is based on rates of adoption by the market and profit potential. Both are predictable from the analysis of an offer, as seen through its Angle of Attack.
In Section 2, you will learn how the Mercenary embodies the industrial psychology of the first growth curve, which we call the “Alpha.” Alphas proactively defend their existing market share from competitors; however, they often get stuck pursuing incremental innovation because they focus on immediate gratification through shareholder returns and risk aversion to their current cash flows.
The Missionary seeks to penetrate the defenses of the market’s incumbent actors and represents the disruptor mindset. In the duality popularized by Simon Sinek, they’re playing to keep playing against an oligopoly of incumbents who are playing to win.1 When an infinite mindset is introduced, a finite game is destabilized. They are willing to take a long-term approach to their offer by continuous investment in their modest idea because they identify with a higher calling.
Because Optimality begins with the advantage of disruption and ends with humility, the Missionary, somewhat ironically, has the advantage. Only during Superiority can the Mercenary course-correct their offer to prevent erosion of their market share, which the Missionary mindset is programmed to pursue. In this section, you’ll learn why incumbent Alphas almost always lose to disruptors in the other three curves of growth:
Beta, lower-end offers that specialize, simplify, and take less desirable share from Alphas in the existing plane of demand.
Gamma, which redefines performance for the market to make incumbents less relevant, but who are laughed off and ignored by Alphas and Betas alike because their offer barely works.
Delta, which are imaginary in the mind of the innovator or entrepreneur, but will inevitably supersede the other growth curves with a solution so innovative that it is unimaginable to incumbents.
The four Angles of Attack enable the ability to see the evolution of entire industries in advance. How will you apply this new superpower in your own life and business?
References
Simon Sinek, The Infinite Game (Portfolio Penguin, 2020).