Law #4: The Law of Perception

The Law of Perception says that in the battle between products, perception is more important than reality.

People tend to think that the best product will win. However, as Ries and Trout say, "Marketing is not a battle of products, it's a battle of perceptions." Sometimes the best product does not win.

This concept seems unfair, but it's fundamental and we might as well get used to it. Ries and Trout go so far as to say that "Most marketing mistakes stem from the assumption that you're fighting a product battle rooted in reality. All the laws in this book are derived from the exact opposite point of view."

Subjectivity

The real issue here is that the words "better" and "best" are subjective terms. People have different requirements and preferences upon which they form very different opinions. There are very few absolutes.

One could credibly argue that OS/2 was "better" than Windows 3.x. The 68k chip was better in some ways than the x86 line. But those are perceptions and opinions. In hindsight, we can simply say that more people perceived Windows and the Intel chip to be better.

Reality Still Matters

My only gripe with this chapter is that it sometimes tries to convince me that perception and reality are entirely disjoint. They're not. Quite frequently, perception is merely an exaggeration of reality.

Here at SourceGear we've got quite a few servers. We have Windows servers and we have Linux servers. Our internal file server is named "Mufasa". Every once in a while, Mufasa gags for no apparent reason and requires a reboot. I can't remember this ever happening to a Linux box here. This experience has caused me (and others) to perceive Windows as being less stable than Linux. But that doesn't mean I think it is fair to categorically label Windows as an unstable product. After all, our phone system is running on Windows and it never has any problems. There is reality here, but there is exaggeration here as well.

I think it's important to remember the Law of Perception, but I would worry if small ISVs started taking it too seriously. Specifically, let's not just give up on our desire to make our products better choosing instead to spend all our resources on the
management of customer perception. The Law of Perception can help us understand when things don't seem to make sense, but it's not so powerful that product excellent doesn't matter.

One Final Thought

The Law of Perception is just one more reason why small ISVs need to get specific as they choose their competition. Don't try to create a "better" product. That strategy is too vague. Instead, try to create a product which is better for a specific group of people with specific problems that are not being solved very well by others. That specific group of people will perceive your product as the best.

· If most of your mindshare inventory is in early adopters, you are in trouble. Early adopters don't stay anywhere very long. Eventually, you will lose most of them.
· Your valuable mindshare is among conservatives. It will be very expensive for anyone who wants to take these people away from you.
· If you are a new player trying to gain mindshare, don't be afraid to steal early adopters from your competitor. It's easier than you think. Just remember that the next guy is going to steal them from you.

This is why Tivo will lose. They built enormous mindshare among the early adopters, but never really made it into the mainstream markets of the pragmatists and conservatives. In the end, Tivo will end up in the same place as the dotcoms, at the bottom of the chasm.
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