Rock, Paper, Scissors

A simple model for understanding what kind of company you are right now. And who you can actually beat.

Scissors is the startup. Sharp focus. One ICP. One edge. Rock is the proven system. Durable. Repeatable. Paper is the giant. Suite. Spend. Distribution.

Each one beats a different opponent. And almost every founder picks the wrong fight.

Scissors loses when it tries to act like Rock. Rock loses when it tries to act like Paper.

The smartest competitive move is almost always behind you. Not ahead of you.

TikTok cut Facebook. Google cut Yahoo. Zoom cut the suites. Three companies that won by staying sharp while their bigger opponents tried to do everything.

A tool you can use. A sharper way to look at your own brand.

Transcript

Speaker 0:03

I'm John Luke, and welcome to Positioning to Win, where you can find consistent branding and positioning advice for founders and CMOs. So let's start with the basic. What's brand positioning? Well, this is oftentimes people think that brand positioning has to do with brand description, but it's not. This is what the market remembers about you. It's a mental slot that people have in your mind versus the alternative. So think about the word positioning. It's what's the positioning against? All right. It's a relative to the market. It's not in isolation. It's not just a description of the brand. Today I want to share a simple tool that you can use for positioning. It's called scissors, rock, paper. This is a quick lessons that mistakes that brands make when they compete and how you can win. So first, there's a startup, scissors. Scissors cuts through the marketplace with a narrow focus. It's got one ICP, one edge, one promise, and there's typically about roughly around five, up to five million dollars, maybe up to $10 million in revenue, right? Startup. Okay. Then Rock comes and it beats Scissors through proven systems. All right. It's durable, it's repeatable. This is when companies go past the $10 million mark, um, you know, upwards to $50 million. You'll see them on the news. High growth companies. And then eventually there's paper companies. And paper covers rock with its sheer mass, right? They have lots of suites, big spend, big distribution. These are companies are typically $100 million plus. So now we have the growth cycle. We have scissors, then we have rock, and then we have paper. And people assume that the growth cycle goes the same way as the competition cycle, but actually goes the opposite way. So when scissors turns into rock or rock turns into paper, in that unstable state, in that growth stage, the transition is where repositioning usually happens or where it should happen. This is the unstable state. Okay. Since people naturally think that the growth cycle and the competition cycle is the same, people compete like the stage that they want to become. And that's backwards. So if you're scissors, you should focus and have a narrow focus to cut through the marketplace, to basically cut through paper, because scissors cuts through paper, and you don't try to beat rock because you're always going to lose to rock. It's tempting to fight the battles you're going to lose, but it's much better to avoid them. Um, so this is a simple lesson from Marty Newmeyer's book, Zag, where he shows you who to focus on and when you can compete. Uh so now here's a trap. All right, you pick the wrong opponent and you you copy up the ladder. So scissors looks at Rock and says, We need systems, we need processes, we need enterprise credibility. Rock looks at paper and says, We need more suites, we need more features, we need more products, we need more spend, we need more brands, we need more everything. And that's where they get bland. And when the brand stops being a weapon that helps you win. So here's the rule: you compete down the cycle. Don't beat what you're becoming, beat what you used to be. So scissors beats paper by being sharper. Rock beats scissors by being more dependable, by being more systematic, okay, and being more durable. So your competitive target is usually behind you in the growth stage, not ahead of you. That's the reversal. And now the part that most people miss the transition period. Okay, so the transition period, this is the unstable state between brand's growth. It's not a small tweak moment, it's a repositioning moment. Repositioning means that you change who you're for, what you're the obvious choice for, and what proof you have to lead with. This isn't just a tagline, okay, because if you don't do the repositioning, you turn your brand equity into a liability and you scale with the wrong sales story. Okay. And when you do, growth gets expensive. Your customer acquisition goes up, the sales cycle gets longer, site conversion rates can go down, and you know, the story gets fuzzy. Even the company, when they're on the sales call, they say, Well, we used to focus on that, but now we do this and we do that. Clients get confused on what your main focus is. So your whole story, your whole narrative, your whole pitch gets a little bit fuzzy. And those can be signals that your positioning needs to be revisited. You want to position yourself to win. And not you don't reposition because it's fun. You're repositioning because the alternative is drifting into the wrong shape or not being sharp enough to cut or durable enough to break, or massive enough to cover. Okay, so now let's make this real with a few quick examples. Paper doesn't lose to bigger paper, right? It loses to scissors. So if you think about the Facebook versus TikTok example, Facebook was paper. Okay, Facebook still is a paper company. It has groups, marketplace events, videos, ads, messaging, uh, creative tools, pages, communities, WhatsApp, Messenger, all these different products and tools. And they have just such a huge sheer mass that they can just kind of drown out the marketplace. Huge platform, right? So if you're a startup company and you want to compete against Facebook, you're not going to compete among saying, oh, I'm going to have a better platform, gonna have better features, I'm gonna have all of these different things, right? You need to have a narrow focus. And that's where TikTok came in. It had a narrow focus. It was one loop, one behavior. You opened up app, instant payoff. Click the swipe, swipe, swipe, boom, you're stuck into the reels, you love it, you share it, right? That for you page won the customer's habit. The threat wasn't a better bundle, it was a sharper habit. Facebook wasn't losing to a bigger Facebook, it was losing to customers' new habit that it couldn't copy, right? TikTong won the habit. People loved it and they didn't want to leave it. So here's a smart move if you're a paper company. It isn't to bolt scissors features into the bundle. It's not just to just add reels in there. It's to spin up a separate scissors brand that can fight and be sharp. So when Meta bought Instagram and let it stay Instagram, or when Google launched YouTube shorts as its own surface and not a Facebook style feed feature, right? This is a great competitive advantage to have that brand compete on its own. Paper that tries to grow its own scissors inside the bundle oftentimes loses. Papers that acquires or launches a separate sharp brands win. Okay. So if you're scissors, here's the lesson. Your advantage is not we're cheaper, we care more, or we're like them, but simpler. It's that we do one job so good, so hard that it rewires the customer's habit. Okay, the customers love it and becomes a default choice for that customer. Same thing happened with Google versus Facebook. Google started off and they had a narrow focus. That was search. Meanwhile, Yahoo in the same time was competing on news, finance, dating, weather, and various portal tools and then search. So Google won the search battle so quickly that even Yahoo quietly outsourced search to Google themselves. Okay. When Yahoo tried to become the whole internet in one place, Google had a narrow focus search and they won that battle. So if you're a startup company and you're less than $10 million in revenue and you're using words like platform or all-in-one solution, you're likely losing your sharpness. You're fighting battles you're likely going to lose. And if you lose that focus while you're scaling, you won't become Brock. Okay, you'll just become a dull scissors. So if you think about this, the same thing happened with Zoom. Zoom was scissors and it beat paper. So there was Google and there was Microsoft. Google and Microsoft already had their users, their distribution, their tools. And then Zoom came along and they had a narrow focus, and that was voice calling. It was fast, it was frictionless, people download it, they can call in on their phone, they can call in through their phone number. And next thing you know, Zoom became the category leader for video conferencing. Okay, so when you can't outspend and you can't outfeature, the product itself, especially in a scissors company, needs to do the brand work. It needs to win through the experience. Okay, just description alone isn't gonna help you win. Now, the other side of the framework is rock, rock beating scissors. So scissors wins when the customer switches. Rock wins when the customer stops shopping. HubSpot beat a swarm of scissors marketing tools by being dependable, integrated systems by the mid-market range companies, right? Shopify beats Scissors for all the do-it-yourself stores and shop builders and Word plugins by being the commerce platforms you could depend on and bet your business on. Okay. Neither of these was the sharpest tool, but both were safe, repeatable, and dependable choice. And that's the rock move. That's how you win. Not by adding different features and by adding and making things too complex, right? It's just by being safe, dependable, and repeatable, right? Something that a business can rely on. So here's the point the mistake isn't that you want to grow. The mistake is you start competing like this stage you're trying to become. Okay, you copy rock when you're still scissors, or you copy paper when you're still rock. And you lose your real advantage before you earn the next one. So quick way to apply this today, if you're rock, delete some of your paper claims. Okay. Pick one edge, one competitive edge that you can win. Ask yourself, what are we right now? All right. Are we scissors? Are we rock? Are we paper? Who are we copying? Typically, the person you're copying is the person that you're scared of. Okay. Who can we actually beat if we're really honest about our competitive edge? If you're in the growth phase of the unstable state between scissors going into rock or rock going into paper, and you don't do repositioning on purpose, you end up in the worst combination. You're not sharp enough to cut, you're not durable enough to crush, and you're not massive enough to cover. And you're just there. And nobody wins from just there. Thanks for tuning into my podcast. I hope I see you next episode, and I'd love to hear your feedback on this one.