(This is part two of a multi-part post on conventional wisdom, which is just a nice word for herd mentality. The opinions expressed are my own, but the are based on the insights of dozens of journalists, analysts, investors, entrepreneurs and even qualified marketers, some of whom have been quoted and interviewed on this blog. I don't expect a lot of agreement here, but I ask that before you react, just consider for a moment, that I might be right.)
The last post was aboutt how most companies, even when they know their industry is in trouble, also believe their company is doing just fine. That belief is becoming more prevalent as independent media and analyst coverage of their industry disappears.
But rather than be concerned about the lack of third-party endorsement of their market offering, most companies believe that they don't need the media to help them get market attention or validation. They believe their product, technology or service is so outstanding and innovative that they can succeed with out it. This is what I call "field of dreams" marketing (if we build it someone will buy it.) It's also the myth that if you build a better mousetrap the world will beat a path to your door.
Industry graveyards are filled with superior "mousetraps" matched with mediocre marketing. Remember the Alpha chip from DEC? For that matter, remember DEC? How about Transmeta? In parallel, the world's largest fortunes have been made off of mediocre technology matched with superior marketing. Microsoft is a perfect example (and don't tell me you've never encountered the blue screen of death.) So what's the chance that an industry characterized by buggy, hard-to-use products, targeted at limited niche partners with lousy marketing is going to succeed?
This growingly prevalent industry blindness is negatively affecting the market as a whole. in the Electronics Desing arena, analyst Gary Smith has been indicating a growing trend of semiconductor designers increasingly dependent on in-house technology to solve the big design problems and turning away from commercial products. This trend has been happening over the past decade ever since the decline of the media covering EDA.
On a larger scale, investors complain that there is not enough third-party research to adequately complete due diligence and decide where to place investments (which has also hit EDA hard.) Out of the 5,000 technology start ups launching every year in the US alone, less than half have any research coverage at all, and much of that is only a single source. The greatest threat to US industry is not outsourcing, taxation, globalization of free trade … it's lack of objective research.
You can complain about the media all you want, but we owe as much to Ben Franklin's invention of advertising-supported media as we do to Adam Smith's invention of economics and market behavior.
So we've discussed marketing ignorance and blindness. Next up: pure ego.