Out of the Box

The “Nachshon” Factor in Marketing

By Menachem Lubinsky on March 09 2007

A prominent business publication recently told the story of two students who had come up with a new health ingredient that they had found in South America. Their research told them that they were the first in the country to introduce the ingredient, which in addition to its health benefits was also very tasty. They, like many entrepreneurs in America, recognize the potential of being first, or the Nachshon ben Aminodov, who was the first to jump into the splitting sea at yetzias mitzraim.

The two students were counting their profits even before they walked into the offices of a major juice manufacturer. The product manager they met with seemed less than enthusiastic about the new product. He characterized the new ingredient as a “spin-off” of ingredients they already included in their smoothies and juices. The devastated students hung tough and in the end prevailed, but for many new idea promoters, the same experience can bring their dreams to a frustrating halt.

New products and new ideas are an important driving force of America’s economy. Major companies spend millions in research and development in an effort to come up with the next big idea, giving them a competitive edge in the marketplace. According to the US Patent Office, only a small fraction of newly patented products actually make it to market. Most end up being a number in a government office.

I have seen many excited entrepreneurs who believe that they have the definitive new product in their hands, only to find out that the product is somehow already available, perhaps under a different name and a slightly different concept but the basic idea exists. In their haste to bring the product to market, they neglected to thoroughly research whether competition exists and to fully understand what going up against an established company or brand actually means.

Marketing journals are full of new ideas and products that do not make it in round one but become very successful in round two. A different entrepreneur may have taken the very same product and positioned it somewhat differently to garner a more receptive market.

The reason people don’t give up even against seemingly insurmountable odds is that the payoff at the end of the day can be immense. In technology, entrepreneurs made millions of dollars by selling a new software idea to a major computer company. Medical and communications technology are other examples where some creative innovators cashed in big time.

Some marketers say that the reason the second tier of entrepreneurs is more successful than the original group is simply that the second tier is so much more prepared. They have done the research about the competition, invested in a presentation that clearly delineates the benefits of the product, and most importantly benefited from the mistakes of the original group.

When you read the literature about consumer behavior, it might leave you somewhat confused. On the one hand, you read that the consumer is very resistant to change. People become comfortable and are loyal to the products and services they have come to rely on. On the other hand, however, is the evidence that the American consumer is anxious and eager to try new products. The truth is that there is no contradiction. If you create enough value in a new product, the consumer will be likely to give it a shot and even stick with it beyond the trial period. But if you don’t create enough value, meaning that the consumer has no reason to change, then they are, of course, resistant to change.

The road to success for a new product or idea almost always leads to marketing. After all, the end user will have to be educated about the value of the product. A man I’ll call Frank came up with an excellent marketing idea for supermarkets and began walking it around to the various chains. In the beginning, he met with anyone who would meet with him. They almost always politely dismissed his idea, but he persevered, reaching out to a consultant who completely revamped his strategy. Now, he first e-mailed a teaser to the head of the chain, then mailed a beautifully designed kit to the marketing director, and then he made contact. He followed up with a call, and with patience succeeded in meeting with senior officials who evaluated his idea and ultimately bought his product.

One big change in Frank’s presentation was that he no longer “knocked” the supermarket for being antiquated and not in tune with the rapidly changing times. Instead, he praised them for being on the cutting edge of change. That little bit of flattery made a difference to Frank and ultimately a few million dollars in his pocket.

Being Nachshon can be immensely exciting but it has its drawbacks, namely that you are proceeding in completely uncharted waters. The idea that seems so novel and innovative to you might be a very unpractical concept to the potential beneficiary. It is sometimes a good idea to test the new idea with a small outfit, just to gauge the response. It may actually help in formulating the presentation to the larger outfit, where there is really a significant payoff.

So if you want to be a Nachshon, make sure that you jump in at the right time or the sea will split without you.

Out of the Box is a collection of strategic marketing articles that Lubicom has published on various topics, trends and ideas in the marketing world. The articles have been published in the Hamodia weekly newspaper circulated on three continents to a readership of well over 100,000.

The name, "Out of the Box" is a term used frequently in business nowadays to describe creative thinking that is not the norm. It is meant to help a business pull away from the pack or separate oneself from the competition. It is to some extent fraught with risk, simply because it is not the run of the mill thinking, but it is at the same time the key to reaching the next opportunity.