36 Strategies for Startup Success Series – Plum For Peach Sacrifices
This is a part of a series of articles discussing strategies that can be used by startups to ensure their longevity and success in any competitive field or undertaking. It is adapted from the ancient Chinese essay 36 stratagems which is variously attributed to the famed Sun Tzu or Zhuge Liang of the Three Kingdoms period. Here the strategies have been re-interpreted with startups in mind for application and use in a business setting.
Plum for Peach Sacrifices – Meaning and Philosophy
If you cannot defeat your opponent evenly, like your strong point is weaker than his strong point, make a sacrifice in a lesser fight, like letting his strong point defeat your weak point, then in a decisive fight, use your strong point to overcome his weak point.
Startup Case Study
Three startups in the fast food business, Gramby’s, McRonalds and Poppai want to debut their new chicken sandwich burger during the same month. Poppai wants to establish early dominance in the market, so it is the fastest among the three fast food startups to launch its new product, the chicken sandwich.
The launch of the new chicken sandwich was a huge success for Poppai. It went viral on social media and there were long queues everywhere at the restaurant for the delicious chicken sandwich burger. In fact, it was not uncommon for a restaurant to be sold out of the burger before the day was over.
McRonalds, not to be outdone, decides to launch its own brand of chicken sandwich just a few days later. There was a massive marketing campaign to hype up the burger, and if it were on its own without competition against Poppai it might have succeeded. However, McRonalds’ chicken sandwich burger faced the unenviable task of being judged by the public in comparison with Poppai’s much vaunted chicken burger. Usually this almost always ends in favor of Poppai for the better tasting chicken sandwich. As a result, McRonald’s chicken sandwich never quite got off the ground and failed to capture the public’s imagination.
Gramby knows that it could not win in a straight-up battle of the chicken sandwiches. It is a brand new startup with no known reputation and no established customer base yet. Instead, Gramby decides to offer another item, a fish burger, while the other two restaurants duked it out. Gramby knows that its new fish burger will not sell as well as it could because the public right now is all caught up in the chicken sandwich hype. Still, offering a different alternative to chicken may still generate some sales.
At the same time, however, Gramby knows that according to the current market conditions, Poppai does not have enough supply of chicken for its chicken sandwiches to satisfy the overwhelming demand. Gramby decides to wait for the right moment to launch its own brand of chicken sandwich burgers.
Sure enough, just two weeks in Poppai has to publicly declare that it can no longer offer any more of its tasty chicken sandwiches because its entire supply of chicken had been used up. At the same time, McRonald’s own chicken sandwich has not yet recovered from the public stigma it had gotten from the public which deemed it inferior to Poppa’s chicken sandwich. As for the general public, there is still a huge demand for delicious chicken sandwich burgers, but no place to go to to satisfy the craving.
Seizing the opportunity, the startup Gramby decides to launch its chicken burger at the height of the chicken sandwich mania while its two other competitors cannot satisfy the market’s demand (one literally ran out of chicken sandwiches while the other is suffering from bad press). Since the burger is delicious in its own right, it manages to sell well enough so that Gramby captures a substantial share of the fast food market.
Instead of introducing its chicken burger at the same time as the other two, thereby creating a scenario whereby Gramby’s strong point (its new chicken sandwich) will have to square off against Poppai’s own stronger sandwich burger (which will most likely result in a loss for Gramby), Gramby decides to sacrifice its fish burger while waiting for Poppai to run out of chicken for its sandwiches (weak point). Just as Poppai’s chicken supply runs out (weak point), Gramby seizes the opportunity and debuts its very own chicken sandwich (strong point) to the public, thus establishing market dominance by the plucky startup.
Summary
The strategy Plum for Peach Sacrifices can be employed by any startup that wants to debut a new product or concept in a competitive environment where it is quite difficult to do so and which may end in failure. Instead of facing the competition head on, the startup can adapt and make adjustments like delaying its launch to a more opportune time or offering an alternative in the meantime. When the market conditions are right, the startup can then launch its product.
