A Great Product at a Great Price

Jack Welch, former CEO of General Electric, was asked this at a business school Q&A forum: what do you think about short term government subsidies so that small businesses can compete with big companies like GE?

Welch’s response:

It’s a terrible idea. The only way for a small company to compete is to offer a great product at a great price. If you need a subsidy then you don’t have a competitive offering.

Jack Welch is right.

Look at the past few years for online companies alone. Google, LinkedIn and Facebook. And consider what could well happen with Zynga, Twitter, Groupon, Dropbox and Vimeo.

Sure, they’re VC-backed, but none of them started out as sure things. Each conceived of and delivered a unique offering along with a unique pricing model. And for some, an entirely new distribution model. The value proposition is so compelling and believable that each of these companies was able to grow at lightning speed.

A well-marketed product does not mean merely a well-promoted product. There’s a good reason that business schools still teach the four Ps.

Find the potholes that are ignored or overlooked in the market. Do the homework on the competition to understand why they cannot – or choose not to – address that need. Find a need that, satisfied, affects millions and moves mountains. Use that as the benchmark to build out an offering that stands apart from the competition, and is strong enough to fill a wide and deep moat around your business.

Written by Michael

Michael Douglas has held senior positions in sales, marketing and general management since 1980, and spent 20 years at Sun Microsystems, most recently as VP, Global Marketing. His experience includes start-ups, mid-market and enterprises. He's currently VP Enterprise Go-to-Market for NVIDIA.

Strategy Studies