From Betamax to AgTech: How Falling in Love with Problems, Not Products, Unlocks Market Dominance

It's the early 1980's in America. A youthful MTV is hitting its stride, the "Miracle on Ice" euphoria still thrums in the national consciousness, and Harrison Ford is bringing Indiana Jones to life for the first time. The fashion world is swapping out bell bottoms for leg warmers, but amidst all this change, the Sony Group Corporation finds itself in a chilling predicament.

Once the dominant home video recording choice, Sony's Betamax platform was becoming overshadowed by JVC's burgeoning Video Home System (VHS) platform.

In 1976, Betamax was the only home recording solution in the US market. But in 1977, VHS was released in the US and quickly captured 40% of the home video recording space. By the early 1980's, things only got worse for Sony and Betamax as VHS took the lead with 60% of the market. 

By 1985, Betamax had fallen from owning the entire home video recording market a decade earlier to a measly 7.5%. A tragedy? Certainly. A surprise? Not exactly.

Sony's misstep reflects a pattern that is all too common in the way most people think about marketing.

It's enshrined in the pages of our marketing textbooks and mindlessly repeated in the lecture halls of revered business schools around the globe. It's the age-old presumption - that marketing is merely a struggle for today's market demand using "better" branding and a "better" product. 

In the late 70's and early 80's, Sony marketed the Betamax system heavily. Their marketing revolved around:

• How Betamax was a better product. Sony frequently underscored the superior video and sound quality of Betamax. They claimed that Betamax offered a more vivid and detailed image and a clearer sound than VHS. And no one cared.

• How Sony and Betamax were better brands. Sony portrayed Betamax as a high-end, innovative product from a leading technology provider against smaller, lesser-known competitors. And those competitors ate their lunch.
• How Sony had been first. Being the first on the market, Betamax pioneered the home video recording industry, which Sony attempted to use to their advantage. But sales continued to fall.

This speaks to a lesson that many companies in agtech today have failed to grasp and take advantage of: 

The company that defines and frames the problem in the customer's mind is best positioned to dominate the category with its solution.

We can trace the seeds of Sony's predicament back to the technology that birthed Betamax. This technological marvel sprouted from the brain trust of a company called Ampex in the mid-1950s - an era when TV studios were grappling with the intricacies of pre-recording their broadcasts. Ampex, designed to accommodate the studios, never deemed it necessary for their tech to record more than an hour's worth of content. After all, the average TV show comfortably fell within this timeframe.

Here's where Sony stumbled.

They transferred the same Ampex technology and its constraints into the living rooms of everyday people, overlooking one vital shift – the change in the definition of success. For a TV studio, an hour's worth of recording sufficed, but the home consumer playing videographer, aspiring to capture their beloved movies or immortalize the latest game of their favorite sports team, found the one-hour restriction utterly limiting.

The customer's problem definition evolved, yet Betamax stood still.

A mindset eerily reminiscent of Sonys Betamax saga has permeated the agribusiness world today.

When faced with the question, "Why should we choose you?" many companies offer the same rehearsed responses:

• "Because our product is superior."
• "Because our brand is more reputable."
• "Because we can tailor-make to your specifications."

This results in companies that are led by their products, their brands, or their customers. But therein lie the pitfalls.

1. Product-led firms often fall prey to their own myopia. Much like an internet troll, confidently pontificating from the dimly lit basement of his mother's home, they concoct grand narratives that exist only within the confines of their organization - a delusion of grandeur, if you will.

1. Then we have the brand-led entities, fluid in their narrative, ever eager to spin a tale that will seal the next deal. In this bid to appease all, they become rudderless, lacking a core identity. In time, they bloat to a certain size, only to implode when they realize there's nothing holding their façade together.

1. The customer-led approach, while seemingly ideal, is not without its share of shortcomings. If you are in business, it's fallacious to presume that your customer has all the answers. Understanding your customers' objectives is essential, but being completely driven by their current wants is a strategic misstep. After all, most people can't envision a future they aren't actively experiencing. Only inquiring about what your customers desire will likely lead to your company's demise. It brings to mind a quote often attributed to Henry Ford, "If I had asked people what they wanted, they would have said faster horses." 

1. The message is clear: your customers need you to be the visionary, to introduce them to products they didn't know they needed, to provide new perspectives on their business, and to chart new categories.

They need you to be problem-led.

• If you succumb to the allure of your product, you lose sight of your customer. 
• If you become enamored with your brand, you risk becoming a penniless artist. 
• If you're intoxicated by sales, you morph into a mercenary. 
• And if you're completely smitten by your customers, you'll be too cautious to challenge them.

However, if you fall in love with the problem, you transform into a beacon for everyone affected by it. Be the beacon for your customers. 

Make something different. Make people care. Make fans, not followers.

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