Helpers and Trojans: How to Take on a Massive Market Incumbent and Win
As I mentioned in my previous post, you know you’ve made it when Gartner creates a category for the market you’ve created. But emerging as a User and Entity Behavior Analytics (UEBA) vendor was just the beginning. Our ultimate goal was to break into the next-gen Security Information and Event Management (SIEM) market, and we faced an immediate challenge. The market was dominated by several large, well-established incumbents including Splunk, HP and IBM — how could we, as a small company and new kid on the block, become a serious contender and carve out a name for ourselves?
Approaching big players’ customers with an offering that directly seeks to replace their solutions can be risky. They have a lot of resources to put behind thwarting your efforts, and if they see you coming, they can crush you. Not to mention if your target customers are happy with the incumbents’ offerings, they won’t even take your phone calls. You need a legitimate reason to meet with prospects that will not be seen as a challenge.
The whole scenario reminds me of the story of the Trojan Horse. According to Homer’s story in The Odyssey, the Trojan War reached an impasse when the Greeks couldn’t breach Troy’s city walls. The Greek army staged a retreat, leaving behind a large ornate wooden horse that the Trojans believed was a peace offering. They brought the horse inside their reinforced gates and danced around it in celebration. It wasn’t until after they’d all drunk too much and crawled home to their beds that a door opened and out crawled a few Greek soldiers. Those sleuthlike soldiers opened the city gates and let the rest of the army in. They took Troy and won the war. When disrupting an established market with large, legacy incumbents, you need a Trojan Horse.
Enhance, Don’t Replace
But what form should your Trojan Horse take? At Exabeam we decided to embark on a product development strategy that enhanced the incumbents’ products and brought real value to their customers. Something that genuinely helped our target market. For that reason, we called it the “helper” play. The helper play owes a huge debt to those clever Greeks. It gets you through the front door of your competitor’s customers without arousing any suspicion, while at the same time appearing as a gift to those incumbents. Your helper app fills in the gaps of their products, so you’re assisting them in eliminating customer adoption barriers.
Palo Alto Networks, a firewall solutions provider, used this strategy effectively and I admired its execution. Like our UEBA solution “helped” SIEMs, their new application firewall helped fill a gap in the market by tackling security risks that other firewalls at the time couldn’t handle. The PA-4000 solved a huge problem and enhanced the incumbents’ offerings without threatening them. However, it was ultimately a small part of a much bigger next generation firewall solution that Palo Alto Networks developed behind the scenes. They went on to dominate the market. An IPO followed in 2012, and last year, Palo Alto Networks had revenue of $1.8 billion.
For us, adopting the helper play meant we wouldn’t try to replace the existing security management systems offered by legacy vendors. Instead, we put our efforts into developing a helper application that could sit on top of those SIEMs. It formed the basis of a product we’d launch later. The customers thanked us for it, got to know us and came to like us. Meanwhile, the incumbents were happy because we continued to add value to their offerings. Our product was loved by Gartner and secured us our first 100 customers. Impressive progress for a company that wasn’t officially competing in the SIEM market — yet!
Leverage an Efficient Go-to-Market Plan
I’m stating the obvious here, but any helper app you design needs to be truly helpful. If you can’t get past that first hurdle, the strategy won’t work. Your helper app should fill a gap in the leader’s portfolio but can’t be so easy to build or obvious to create that the incumbent will build it and push you out of the market. Your helper app also needs to give you a real advantage and create a unique selling point. Most importantly, it should present you with a way to introduce your own competing product through the back door to a group of potential customers.
Developing a solution that complements and enhances an incumbent’s offering will naturally lead you to concentrate sales and marketing efforts on the incumbent’s customer base. This makes life easier for your company in the early days and focuses your resources on winning a discrete set of accounts. It also makes light work of finding reseller partners, if you need them — a quick look at the partner listings on an incumbent’s website gives you the information you need. At the time we launched, the SIEM leaders were Splunk, ArcSight and IBM and we stayed laser-focused on their customers and partners. I still remember the feeling the day we landed our first customer — Under Armor — a Splunk customer who wanted a true analytics engine that identified the unknown threats their Splunk SIEM couldn’t find. That use case became a recurring theme.
Build Bridges
Your helper app, like the Greeks’ beautifully carved horse, must play another part. It has to not only get you through doors you cannot open on your own but enable you to gain the trust of people who otherwise might not have wanted to deal with you. The great part about this strategy is that you can learn from your customers, gather critical intelligence and learn firsthand about perceived shortfalls in the incumbents’ solutions as you deploy yours side-by-side with theirs. This helps guide the development of the product you’ll eventually build to replace them.
With trust and respect levels running high it’s possible (and even desirable) to join the technology alliance programs belonging to incumbents and use that exposure to grow even further. You might even find, like we did, that you get offered speaking slots at their user conferences! (Our first and last Splunk .conf speaking session, by the way.) That visibility should help you sell even more helper apps, which in turn should enable you to hire more coders and make that final development push to launch your own secret product to the world.
Surprise the Competition, but Not Your Allies
So, the time has come to break out of the Trojan Horse and open the gates. Ahead of the formal launch, it’s important to pre-sell your full product to a handful of selected and perfectly-aligned customers. They will be invaluable references once you officially launch and will enable you to sell to many more organizations. In our case, we also took time to brief our partners under NDA so that they were not surprised when news of our new solution dropped. You want them on your side too.
I’ve long admired the helper play for the innovations and developments it has brought to the tech industry. The strategy, applied to our business, means that today we have more than 200 customers and are one of the market leaders in our field — and we continue to grow market share. I watch new players adopt the helper play strategy and have great admiration for the exciting and visionary solutions they are creating. The Trojan Horse story gave us the saying, “Beware of Greeks bearing gifts.” Perhaps it’s time for us to update that to, “Beware of geeks bearing gifts!”
Not to overdue the war analogies (maybe it’s my Israeli military training), but I see facing the competition as a battle. Like those Greek soldiers in the Trojan Horse, you’ve got to suit up and take in the right team. The culture you build, the values you define, the people you hire…they’ll help you win those battles every day. But that’s a topic for another post.
