Markets Torn Asunder

In the future, you are likely to find yourself occupying one of three spaces in your market place. Those places will be super-transactional, super-relational, or the muddy middle.

Amazon.com is super-transactional. Before Amazon.com and Kindle, we bought books from bookstores. We also did a lot more shopping in retail stores. When the idea is to reduce friction as the way to create value, super-transactional wins. Uber is super-transactional. So are all of the online travel sites, as are all convenience stores.

The opposite pole is super-relational. My tailor sends me pictures of new suits by text. He knows what I like, and he keeps an eye out for me. In the days before Amazon.com I frequented a small, used bookstore. Without me asking, the people who ran it found me books that they knew I would want. But don’t mistake super-relational for a B2C play. It’s a B2B play, too.

I have purchased enterprise software from a salesperson multiple times, specifically because it comes with some risk, has a high strategic value, and requires greater trust. I have a relationship with my production company for the same reason, even though I am continually called on by other companies. Super-relational means you are part of your client’s team, their decision-making, and their future.

The problems exist in the muddy middle, even though there will always be people and companies who occupy “good enough.” If you aren’t transactional enough to compete against the super-transactional, you have to create greater value—value that is meaningful to your clients. If you aren’t super-relational enough to capture enough of the value you need to support that model, you will be relegated to the market for “good enough.”

If you are super-transactional, you are only competing against the super-transactional. You aren’t geared to compete against the super-relational, so you never have to compete there. If you are super-relational, you can’t compete against the super-transactional, because that market isn’t yours. Super-relational competes with super-relational, and sometimes the “good enough” competitors for the clients who are aspirational and not quite there yet.

The challenge in the muddy middle is that you are forced to compete against both sides. You can lose to the more transactional, and you can lose to the super-relational.