It’s not good to be Mark Zuckerberg these days. The CEO of Meta lost billions and laid off thousands due to an overinvestment in the metaverse. His big idea, that people will someday prefer to interact with one another in a virtual rather than real world, had a caveat – everyone still lives in the real one.
Zuckerberg’s concept of creating a virtual 3D metaverse is an extreme example of what can go wrong when your brand strategy is led by differentiation – going for something different from what everyone else is doing, trying to occupy a space in the market not occupied by competitors, but also, and most crucially, not yet wanted or needed by customers.
Leading with differentiation can be a dangerous approach. In most cases, an empty space in a market is devoid of competitors for a reason. Most of the time, it’s because innovation hasn’t yet created a solution that drives customers to it. Here lies Zuckerberg’s issue. He’s leaning into this concept as if it’s something the customer wants that hasn’t been created yet. He’s essentially trying to force it. The problem being, no one cares.
Differentiation, obviously, can be very effective, but it comes with real risks and costs when pursued with a muddy rationale. De-positioning – one of the most effective approaches to brand positioning – means highlighting something positive about you, a solution you offer that your competitors can’t or won’t, one that relieves customers’ pain points and satisfies their needs. It’s an approach that should be enacted first because, by definition, it forces you to focus on those customers’ needs and competitors’ weaknesses.
Apple’s iPod is an excellent example of successful de-positioning. The iPod was not an entirely new-to-market, first-mover concept. Before the iPod, there was the Walkman, Sony’s ultra-popular portable player with headphones. With it, people listened to music on the go, though they didn’t love having to carry cassettes or, later on, CDs.
But it wasn’t the iPod that followed the Walkman. As digital MP3 files started to replace CDs, in 1998, South Korea’s Saehan Information Systems created the first portable digital audio player, the MPMan. By the early 2000s, approximately 50 portable MP3 players were available in the U.S. – and no firm had achieved anywhere near the dominance that the Walkman had enjoyed 20 years earlier, as Ron Adner wrote in The Wide Lens.
The MP3 player market eventually consolidated around a dominant product, the Apple iPod, which launched three years after the MPMan as Apple addressed the major MP3 customer’s pain points.
Downloading an entire album was a multi-hour affair. Without the widespread availability of MP3s and broadband, the value proposition didn’t work. Steve Jobs knew this. On its own, the MP3 player was useless. Jobs understood that for the device to have value, other co-innovators in the MP3 player ecosystem first needed to be aligned. In October of 2001, when Jobs announced the iPod, Apple solidly put those pieces in place: MP3s and broadband became widely available.
At the heart of the iPod’s value proposition was its seamless integration with iTunes music management software. This also gave Apple an advantage when, in April 2003, it completed the evolution of this ecosystem by launching iTunes Music Store. This instantly made downloading respectable, as well as boosting its ease, reliability, and quality versus free downloads. And with people willing to pay 99 cents a song, the record companies signed on and accepted legal downloading as a lesser evil.
For an example of differentiation gone bad, consider LG’s mobile phone division, may it rest in peace. Back in 2013, the Korean company released a phone called the G Flex: its engineers used flexible technology to create a curved screen, apparently just because they could. The rationale the marketers offered was that this provided a more immersive experience when watching a movie on the phone, but for other purposes it was awkward and annoying. The product flopped, yet LG put out an unsuccessful sequel in 2015, the G Flex 2. The oddball phones no one asked for continued to emerge over the years, including 2020’s LG Wing – its main screen could turn, revealing a smaller screen underneath and creating a T-shaped smartphone.
Meanwhile, the company’s regular phones were indistinguishable from Samsung phones (except for problems with build quality that led to class-action lawsuits and notoriously inadequate support for software upgrades). After 11 years as a maker of Android phones and 23 successive money-losing quarters, LG closed the division in 2021. Even then, it was on the verge of releasing the LG Rollable, with a flexible, extendable screen.
Contrast that sort of flailing innovation with probably the central way Apple has de-positioned its competition. By focusing on seamless integration among all its devices and software as well as sleek design, Apple has created an ecosystem that provides intuitive ease of use, smooth sharing of music, photos and files among devices, and a high level of privacy. Customers are willing to pay a premium for this. Once they enter the ecosystem, they are loath to leave. (Apple’s tight control over its App Store, which has brought it an antitrust lawsuit, is one factor that adds to the ecosystem’s “walled garden” effect.)
Back to Zuckerberg. With the concept of the metaverse not well defined, Zuckerberg’s foray could be classified as a first-mover action. But, while Apple waited for everything to be aligned so it could solve the customers’ pain points, Zuckerberg, on the other hand, created pain. His platform can only be accessed with Meta-produced VR headsets, which are expensive and inconvenient, and people just don’t love wearing them.
In fact, other metaverse pioneers recognize the need for a better headset moving away from it. Roblox, Fortnite, and Minecraft all introduced flat metaverse versions available on browsers and mobile, which are becoming more popular than Meta’s 3D version. These solutions deliver the experience to a place where people feel comfortable and aren’t looking to leave. They’re enhancing the environment they already love.
So, Zuckerberg’s challenge is monumental and probably unattainable – getting people to fall out of love with something that works for them and move to a place they find uncomfortable and silly (wearing those headsets). The question is, why doesn’t he understand this? He’s no stranger to solving pain points. At its inception, Facebook de-positioned the clunky social environments of Myspace and Friendster by delivering a simpler place to connect and navigate. Making Facebook available on mobile was a big deal at the time. It delighted users. And then, after acquiring Instagram, he took it to the next level and delivered that connected experience on steroids.
Zuckerberg needs to take a lesson from his old self – great brands differentiate themselves and de-position competitors by understanding customers and solving their problems better than everyone else in the market. Creating pain will never be a solution to winning. Not now. Not then. Not ever.
Cover image source: Glen Carrie