Every large company starts somewhere small. Amazon was not always ‘The Everything Store’; they started out by selling only books. Apple was not always the ubiquitous computing business it is today; they started by building personal computers for a small market of tinkerers and creators. They built a stronghold within a niche, and then grew into other more lucrative categories.
They started with a Beachhead.
I first came across the term in Bill Aulet’s Disciplined Entrepreneurship. Like most business strategy terms, this one also comes from war. Remember Normandy? That was the Beachhead the Allies chose when they decided to capture Nazi-occupied France.
The idea is this: if you want to capture a territory where an incumbent already exists, put your full force behind capturing a Beachhead where the incumbent is vulnerable, and expand into larger territories from there.
While I dislike the overuse of war metaphors in business, I find the idea of a Beachhead to be very useful in gauging how a new business might do.
In our work, I regularly see early-stage startups with polished products, but few paying customers. Some end up working hard to capture an incredibly hard niche. Some chase a direction that turns out to be a dead end. Some capture the Beachhead and swiftly expand into larger markets, only to realise they’ve occupied a space they weren’t really interested in serving and lose their excitement.
In short, getting the Beachhead right is hard. To capture the right Beachhead, I put together five questions for founders in what I'm calling (despite being told that it’s a terrible name)...
"The Beachhead Smell Test"
Q1. Does your product meet a strong customer need 10 times better than existing solutions?
I don’t want to sound unforgiving, but I really do think that when you’re launching a new product, slightly better is just not good enough. If your product doesn’t solve a problem in a way that’s far better than existing solutions, it’s likely to be a hard sell. Why? Most early adopters try out new products because their current solution doesn’t solve a key problem they have, or solves it poorly in comparison to newer solutions.
Take Figma’s story. When Figma launched in 2016, it was like Sketch (the tool of choice for many interface designers) in most ways, except for one key feature – real time multiplayer experience.
Back then, Figma was called the “Google Docs for interface design.” What did that really mean? Figma was browser-based and that meant designers could work on the same file at the same time.
This was quite literally life changing for designers. On Sketch, designers would typically create duplicates of a master file, work on those duplicates separately and then manually merge them back into a master. If Figma was the Google Docs of interface design, Sketch was a plain old Word document, going back and forth multiple times between a team.
Figma also had a few more exciting features at the time, like commenting that made feedback really easy, but the multiplayer experience was the real game-changer. Overnight, collaboration between designers became ten times easier. In fact, that was Figma’s sell:
Figma's homepage in 2016
Obviously, there was a cost to switching from Sketch to Figma. I remember how cumbersome it was for us at Obvious to make this transition. But the pain was worth it because Figma solved a need much better than any other software out there.
I would suggest that when you’re selecting a Beachhead, the problem’s intensity and the gap between existing solutions and your solution should be substantial. It’s simple really: for users to adopt a new product and bear the cost of switching, your product needs to meet a customer need 10x better than existing solutions.
Q2. Can a tightly scoped product be built around this unmet need?
Let’s say your product does solve a problem 10 times better than the incumbents, but they offer a lot of other features that you don’t. I know many founders feel that not having all features hurts their chances, but that’s not necessarily true. After all, you don’t get to capture an entire country before capturing the Beachhead, right?
The nature of a Beachhead is to be tightly focused. Beachheads are just entry points into a much larger territory. The idea is to capture a small set of users before going after your TAM. Snapchat understood this.
Back in 2011, Facebook and Instagram were dominant as far as social networks were concerned. But they had a sense of permanence – a post lived on your profile for a long time. Snapchat was born out of the insight that teens and young adults wanted a social network that was more “temporary” and private. So from 2011 to 2013, they just focused on disappearing, and therefore temporary media:
In 2011, users could send disappearing photos to an individual
In 2012, users could also send disappearing 10-second videos
Finally in 2013, users could post a disappearing story for all their friends and send text messages that would vanish
Snapchat's mobile app in 2013
With just a tightly focused product, Snapchat created enough value for its early adopters. It was only later that Snapchat added features to compete with other social media platforms. Snapchat’s Spotlight feature, for example, mimics TikTok. The now 12-year-old company continues to innovate and grow by some 50 million users every year. However on Day 1, or even on Day 1000 for that matter, Snapchat had a narrow focus and rightly so.
Consider this: If you solve the unmet need really well and capture the Beachhead, you can always build all features your incumbents have. But if you wait to build everything before you launch, you might not get a foothold in the market at all.
I also think that pre-PMF teams need focus to build and ship solutions quickly. Speed can get severely compromised if the Beachhead is too broad. Instead, if you choose a tightly focused Beachhead, you have a somewhat complete product for someone.
When scoping a Beachhead, you could ask yourself: is the product something that many people will like, or a few loyal people will love?
Q3. Will customers adopt the product despite the lack of feature parity with existing solutions?
Once you’ve scoped out a product that customers will deeply love and stay for, you have to take care of the features that users cannot do without, the deal-breakers. Sure, most companies don’t start out with all the features the incumbents have, but they do start with a “minimum feature set” that includes the deal-breakers.
Remember Sketch, the company that got disrupted by Figma? Well, before they got disrupted themselves, they disrupted someone much larger – Adobe. Sketch entered a design software market that was already dominated by Adobe Photoshop, Illustrator and Fireworks. But instead of going neck and neck with them, Sketch instead chose to become intentionally thin-slice. They homed in on specific features that interface designers needed, like:
simple shape tools (the stereotype is true: interface designers mostly draw rectangles, and when they are feeling adventurous, they round their corners)
text and colour tools
basic vector editing capabilities
a layer-based interface
and ditched everything else that they didn't need, like:
complex curve manipulation
advanced vector brushes
sophisticated image editing tools
They continued to add depth by building features that made developer hand-offs easier and creating a community of users that made plugins. Sure, they didn’t reach complete feature parity with the incumbent players. But that was never the plan. If Adobe’s products were a Swiss Army knife, Sketch was a scalpel:
“I feel very strongly that the depth of our features, not the scope of them, has been what has made Sketch popular.”
— Pieter Omvlee, founder and CEO of Sketch, in 2014
By trading breadth of use for depth of features, Sketch became a product that users deeply loved and had no deal breakers.
Sketch's first ever interface (via MacStories)
Q4. Does the Beachhead have a network effect that will help the product gain organic traction?
In my experience, new businesses mostly don’t have the capital for marketing efforts at scale. And that needn’t be a weakness. It pushes you to build a product your users will love, and love enough to tell more potential customers about your product. Isn’t word-of-mouth marketing the true litmus test of user love anyway?
It helps if the Beachhead has the prerequisites for network effects right from the get-go. It gets you inexpensive organic traction, and if you’re really lucky, virality too. But how do you get there? Bottom-up strategies like referral programs, product videos and customer communities help. Like Dropbox.
In just 15 months, between September 2008 and January 2010, Dropbox went from 100K to 4 million users. 35% of those people came from one of the most successful examples of the network effect: Dropbox’s referral program.
When you invited a friend to Dropbox, you would get 1GB of free additional space. Your friend would get 500MB for free if they accepted your invite.
But Dropbox didn’t stop there. They made it easy to send these referral links by letting users sync contacts from Gmail, AOL, Yahoo! and other email providers. They also gamified the program, by exposing how users’ invites were performing and how much total space they’ve earned. And finally, they built a viral loop by informing referred users that they could get even more space by inviting more friends.
Using this traditionally B2C approach for a B2B product, Dropbox first turned people into personal users and advocates of the product. Later, when companies thought of cloud storage solutions, many people within those companies advocated for Dropbox because they were using it for personal storage and had a great experience with the product.
The cost of Dropbox’s referral program was nothing compared to the 3900% growth it unlocked. Their bet paid off many times over.
Q5. Is the Beachhead a way to enter an existing market, or is it a way to create a new market?
Most startups worth their salt can capture a Beachhead. But the real challenge is, as Geoffrey Moore puts it, crossing the chasm from a “few” users to many, or from your early market i.e your Beachhead, to the mainstream market. I think there are two ways to go about capturing the follow-on TAM.
Geoffrey Moore's Crossing the Chasm
The first is: You use your Beachhead as a differentiator to enter a growing market, but later pivot the product to meet the standard customer expectations in that market. This is how Dunzo became a relevant player in the hyper-local delivery game.
Dunzo started in India as a personal concierge service in 2014. You could hire someone to run an errand as mundane as picking up a package from a friend’s place or as specific as going to your under-construction house and sending you pictures of the construction site.
The fact that they would do even the most random tasks for their customers made them popular, though they knew it wasn't a scalable idea. But that was okay because Dunzo was just using their Beachhead to enter the rapidly growing market of hyper-local delivery.
As Dunzo scaled, they narrowed their focus to services like instant grocery delivery, allowing them to meaningfully compete with the likes of Swiggy, Blinkit and BigBasket. Today, all the random tasks you could run on Dunzo are gone, but it's a well recognised competitor in the space.
In the first approach, you shift the product to meet the market expectations. But in the second approach, you build the market around your original product, without changing too much about it. Sounds like a tall order? It is, because only a few have done this successfully. One such company is Slack.
Back in 2013, not many companies were shopping for a group chat system. So the team at Slack had to create a product users would want (whether they knew it or not), but they also had to create the market for it. Their job was to communicate the value of Slack in terms that users were familiar with.
What did they do? Instead of pitching Slack as a group chat system, they pitched it as a product that would transform an organisation. They sold “a reduction in the cost of communication”, “75% less email”, and “more visibility into projects and progress”. These were real problems for teams and Slack offered a way out. Suffice to say, Slack became a hit and surpassed HipChat just a year after launch.
Slack and HipChat’s active users from 2013-2018 (data source: Zapier)
Of course, changing consumer behaviour involves a lot of rejection. In fact, many initial investors passed on Slack (which, in retrospect, seems hard to believe). But Stewart Butterfield, Slack’s co-founder, believed that Slack would fundamentally change how teams communicate. In a memo sent two weeks before the first release, he wrote: “There’s no point doing this to be small. We should go big, if only because there are a lot of people in the world who deserve Slack.”
I’m not sure if one way is better than the other, but the second way is a lot harder. However if you successfully create a market, it is disproportionately more rewarding — you’re essentially making a contrarian bet on how people will use a piece of technology in a way they currently don’t. That foresight allows you to dominate the market for a while before other players come in.
Having said that, I do know that great companies have been built both ways; by changing the product to meet market expectations or by creating the market for the product.
You might see companies grow in different ways and sometimes in different directions once they’ve captured their early market, but I’ve found the Beachhead Smell Test to be a useful compass for founders to have.
In conclusion
Building a business is hard, and nobody has everything figured out right at the beginning. That's totally okay. I'm not suggesting that one should have answers to all these questions when they start. In my view, more important than having the right answers is asking the right questions.
So if you’re a newly minted founder with an exciting idea, the next thing I would recommend that you ask yourself (and your co-founders!) is: does this idea also have the makings of a successful business?