We’ve all seen the frightening statistics of the survival rates for new businesses. Whether it’s the survival rate for a business making it past year one. Or the few fortunate enough to make it to year five and beyond.
The numbers are so scary, I’ll refrain from providing them in this article to save you from the nightmares that may result if I did.
However, I have good news for you. Despite the dire data, there is a positioning strategy that startups could apply that would increase their chances of survival exponentially. But like all great things attained—it requires a sacrifice.
But for those willing to make the sacrifice, this positioning strategy will give startups the best chance to survive.
The positioning strategy that I believe is best for startups to take in order to ensure survival is referred to as “The Stealth Play,” and it was created by venture capitalists and former Microsoft marketing leaders, John Zagula and Richard Tong.
As a positioning strategy, the Stealth Play was first introduced to the public in Zagula and Tong’s book, The Marketing Playbook. Which describes the Stealth Play as being, “Like a quarterback sneak. Rather than running a play where you outrace the other team to the goal line, or launch a brutal assault against their defenses, you find a way to slip through while they aren’t noticing.”
For those unfamiliar with football terminology, the Stealth Play consists of brands (especially startups) finding gaps in the market to build a business around—while also avoiding confrontation with the larger—more established brands in their respective industry.
When to apply the strategy
The best time to apply the Stealth Play is as soon as possible. Preferably, before your startup is even launched. However, if you’ve already launched your startup, it’s not too late to pivot to the Stealth Play. But before you do, let’s first see if the Stealth Play is for you.
As the founder or marketing manager of a startup, there’s plenty of things that you have to be aware of. But the two most important things that will command most of your attention are: your customers and competitors.
Once you realize who your ideal customers are—you could then make a conscientious decision on whether to apply the Stealth Play or not.
If your ideal customers are also coveted by the larger brands in your industry (your competitors), it’s best to run the Stealth Play. Which means that you’ll purposely ensure that your brand will fly under-the-radar of your larger competitors in the market by finding a niche which will serve consumers that the larger brands aren’t focused on.
As stated in The Marketing Playbook, “If you can’t beat ‘em… join ‘em or at least stay out of their way.” We'll discuss how you could join them later.
How to apply the strategy
The Stealth Play is all about a business appealing to a consumer base while also avoiding confrontation with larger brands in the marketplace that could crush the business if threatened. Or, if the larger brands simply just want to clear out the competition.
There’s two ways to apply the strategy:
One way to apply the strategy is by choosing a niche in the market that larger brands are neglecting at the moment. The Marketing Playbook states, “Your job is to keep finding places where you can add (or steal) a bit of value.” But most importantly, the market has to have a consumer base large enough to sustain the business.
A great example of a brand that applied the Stealth Play is Kodiak Cakes. Kodiak Cakes started off as a company that produced protein-rich pancake mix. They were able to fly under-the-radar of the larger brands in their industry because food manufacturers either did not believe there was a market for protein-rich pancakes. Or, they felt the market wasn’t worth cultivating.
By finding a gap in the market and avoiding direct competition with larger brands like Bisquick and Krusteaz, Kodiak Cakes was able to have the protein pancake market to themselves for years. By the time the larger brands realized that there was a demand for the product—Kodiak Cakes was already the known leader.
Today, you could find Kodiak Cakes on the shelves right next to those larger brands at your local Walmart or Target stores.
Another way to apply the Stealth Play is by being what I call a, “Remora Brand.” The name derives from the remora fish—which is the small fish that you usually see adjacent to large sharks in the sea. Remora brands fly under-the-radar by actually being right next to the larger brands—but in a helpful capacity.
For example, Insidesales.com is a cloud-based sales acceleration technology company that works with Microsoft to offer its sales acceleration platform to customers using Microsoft’s CRM platform. This helps both companies because Insidesales.com isn’t a threat to Microsoft. Therefore, Microsoft has no reason to target Insidesales.com as a competitor. In fact, Microsoft has a vested interest in seeing Insidesales.com prosper.
The reason why most startups fail is because their expenses exceed their sales revenue. The best way to beat the odds of the same fate for your startup is by finding gaps in the marketplace and positioning your brand to appeal to a consumer base that is currently underserved.
As previously stated, all great things attained require a sacrifice. The sacrifice for startups that run the Stealth Play is that you relinquish the larger market to established brands in order to increase the chance of survival by going after a smaller segment of the market.
But if applied correctly, the Stealth Play—followed by a great marketing strategy that creates brand awareness and conveys brand distinctiveness—will give your startup the best chance to survive. And eventually, your startup could go on to become one of those established brands that startups will avoid confronting.