Power. The word
brings to mind the Godfather, or perhaps a political or military leader, or
maybe a great CEO like Jack Welch in his General Electric days.
We hold these images of power because we are in awe of large
organizations. They can get things done
even when they face great opposition.
But the purest power comes from another source. It is beautifully simple, and anyone with
imagination can discover it.
Take Jerry Fiddler and David Wilner. In the 1980s, the pair left Lawrence Berkeley
Laboratories to create one of the first “embedded operating systems” – the
software that makes microprocessors do the things we need them to do. One of the world’s greatest firms, General
Electric, came to Fiddler wanting his small team to ramp up big time in order
to make GE’s medical imaging machines go digital. Fiddler wanted the deal, but unbelievably he
said no. Fiddler knew that GE developed
on a SUN platform. But Fiddler’s team had
just invested in another development platform made by ISI (a company that would
later disappear). Straight out of central casting for the role of an engineer, Fiddler (pictured below) could not accept the costs of changing from that platform
and having to come down another learning curve.
Back at GE, Fiddler’s shocking rejection triggered a
crisis. Only Fiddler’s team could make
GE’s new innovations in digital radiology work well enough to impress their
customers. Fiddler’s fledgling firm,
Wind River, was tiny and powerless by most measures – but it was essential to a
massive potential market for one of the world’s great firms. The crisis escalated,
and the decision was made at GE to change their development platform to ISI! At that point, SUN’s leadership met in
emergency meeting and called Fiddler, offering Wind River whatever it would take to move them over to a SUN platform.
Jerry Fiddler is brilliant and imaginative, but he does
not play the game of power like Machiavelli’s Prince. Yet in that moment he wielded the purest
power: the power of product-market fit. Firms
with this kind of power do not muscle others to get their way. They need not call in political favors, nor sabotage
their rivals. They are powerful because
they provide a product or service that others feel they absolutely must have. The power of product-market fit comes from
the will of others. Others want you to
succeed, and will do anything they can to make that happen. Such power has a momentum of its own, as
those who need you set their minds and might to the task of making you
win. Holding back the power of product-market
fit is like holding back the tide.
What is the path to the power of product-market fit? The answer is simple: Tight product-market fit is discovered (see my blog on discovery). In Wind River’s case, over a series of projects the team worked closely with a variety of clients to discover how embedded operating systems can make microprocessors do amazing things. With Francis Ford Coppola, they enabled digital film editing that would result in masterpieces like The Godfather. The American space agency NASA worked with them to enable microprocessors to run in the Mars Rover “Curiosity”. Even the American National Football League worked with Fiddler, figuring out how to use microprocessors in video-graphic equipment so that teams could quickly review game films during practice. Over time, working closely with a variety of customers, Fiddler and his team honed the capabilities of their product so that it was essential to manufacturers. Even Motorola, which made its own embedded operating system, insisted on using Wind River’s instead! This is the power of product-market fit.
I’ve used a technology example to illustrate
my point, but the power of product-market fit appears everywhere. In the construction business, some
companies understand “design-build” contracting so well that their customers
will use no other firm. Such
is the case for Linbeck Construction operating out of Houston. Linbeck’s customers return, knowing
that this company has developed a great process for minimizing costs and
staying on schedule. In
manufacturing, Newell-Rubbermaid has developed over years of experience the
ability to manufacture staple consumer products at low cost, and the logistics
necessary to keep these products on the shelves of mass retailers. So it is that Newell makes much better
margins than most who sell through the mass retailers. No doubt you can come up with
your own examples: What
company is essential to making you succeed? Odds are, like Linbeck, Wind River,
and Newell, that company took the time and effort necessary to discover
product-market fit – and is powerful now as a result.
Research on the importance of fit between organizations and their markets can be found in a book by Glenn Carroll and Mike Hannan.
