Simon Associates Management Consultants does a lot of work with clients that are in an early growth stage. A little while back, we attended the International Travel Goods Show for one of our clients, Cabeau. Cabeau is a relatively new company in the comfort travel arena, making products designed to make traveling more comfortable, including a variety of travel pillows.
Now, you have to say to yourself, not another travel pillow. Just Google travel pillows and see how many there are. Why would anyone in their right mind want to compete in what the authors of Blue Ocean Strategy define as a red, red ocean? But after spending time with our client over the past year and speaking to wholesale purchasers over the past several weeks, I am beginning to think that I was wrong…that there are exceptions to competing in red oceans and that it is possible to carve out a position that is unique in this market.
So here are my thoughts:
1) Is it possible to carve out a unique position in a commodity category? In the past I was inclined to say no. But, on reflection, perhaps the answer is yes and here is why. In a blog that was written for www.cabeau.com on May 22, 2013, Cabeau talks about all the research that went into developing a pillow product that was different, that actually worked. So even though the category is crowded, Cabeau has been able to get visibility because it took the time to research it and come out with a superior product.
At Simon Associates, we take an anthropological approach to developing new products and services. We try to help clients build from the consumer backwards—something that is focused on in the book The Lean Startup. Simon Associates has always used the phrase “deep hanging out,” and that’s what our client did to understand the problems that users of competitive pillows had. It was the ability to “see, feel and think” about both the problem and the solution that allowed David Sternlight, CEO of Cabeau, to develop the Cabeau Evolution Pillow™, a travel pillow that really makes a difference. Because the market is so fragmented, I can’t tell you which pillow (or company) has the highest unit and dollar volume. All I can tell you is that Cabeau has had phenomenally profitable growth over the past 2 years. And the Evolution Pillow has been recognized as a truly unique product in this commoditized category.
2) People like to do business with good guys.Walking the floor at the travel show, I saw a lot of buyers going from booth to booth with little personal interaction. It was very different at the Cabeau booth. Of course, it helps to have a superior product, but it also helps to have a leader, the face of the company—David Sternlight—whom people really like. They recognize his honesty…his straightforwardness and his personality. People want to engage because they are drawn to him.
3) Quality is a key ingredient. At Simon Associates, we have been working on developing a new pillow for Cabeau’s line, something with a higher price, something that is flashy…something that will really sell. But the folks at Cabeau are really into products that are effective. The Cabeau management refuses to launch this new product until they are assured that it will really work.
That is not always the case with other manufacturers. The temptation to generate dollars is often too great, which is why products that are not effective enter the marketplace. Of course everyone knows the risks of doing this. Great names become not so great. Fortunately, our client understands the equity in the Cabeau name and the need to keep a high standard.
So this gets us back to where we started. Can you launch a product into a red ocean and be ultimately successful? I think you can, HOWEVER: the product must be effective and deliver on a promise. The company must stand above the rest and high quality must be preserved. For real success, a great product concept, great execution, high standards and the intangibles are all required.