Inside the Tornado: Strategies for Developing, Leveraging, and Surviving Hypergrowth Markets (Summary)
Imagine you're in a war. Your enemy's tank is technically superior, but you can produce ten of your slightly clunkier tanks for every one of theirs. Who wins? In the chaotic, winner-take-all scramble of a technology 'tornado,' the market doesn't reward the best product; it rewards the one that's everywhere. The goal isn't to be better, it's to become the undisputed, unavoidable standard—the 'gorilla' that starves all competitors of oxygen.
The Gorilla Wins the War, Not the Best Product
During the tornado, the market demands a single standard. The company that can ship a 'good enough' product in massive volume and secure key partnerships becomes the market leader, or 'Gorilla.' This de facto standard gains unstoppable momentum, even if competitors have technically superior products.
Microsoft Windows in the 1990s. While often criticized as being less stable or elegant than Apple's Mac OS or IBM's OS/2, Microsoft's aggressive licensing strategy ensured Windows was pre-installed on the vast majority of PCs. This ubiquity made it the default choice for both consumers and software developers, creating a powerful feedback loop that locked in its market dominance.
Abandon Your Niche Strategy
The highly-focused, customer-centric strategy required to 'cross the chasm' becomes a liability inside the tornado. You must switch from a specialist (serving a niche) to a generalist (serving the mass market), prioritizing speed and market coverage over customization and perfection.
Oracle initially gained traction by building custom database solutions for specific government agencies. But when the relational database market exploded, they shifted tactics dramatically. They offered a standardized, one-size-fits-all product and focused their energy on a massive, aggressive sales force to capture the entire mainstream market, overwhelming niche competitors.
Find the 'Bowling Alley' to Enter the Tornado
Before the tornado hits, you must build momentum in the 'Bowling Alley.' This involves targeting a single, specific niche market (the 'head pin') and dominating it. The credibility from this win allows you to attack adjacent niche markets, creating a chain reaction that positions you as the leader when the broader market takes off.
Documentum, a content management software company, first targeted pharmaceutical companies. They solved a critical, high-stakes problem: managing the immense documentation for FDA drug approvals. This visible success in a demanding industry served as a powerful reference, allowing them to then easily enter other regulation-heavy industries like oil and gas, building the momentum needed to ride the tornado.
