In the world of business, it's easy to assume that being the market leader is the ultimate goal. After all, who wouldn't want to dominate their industry and enjoy the spoils of success? But there's a compelling case to be made for the advantages of being a challenger brand - a company that may not be the top dog, but is hungry, agile, and ready to shake things up.
Marissa Solis, SVP of Global Brand and Consumer Marketing for the NFL, put it this way: "If you can combine both the swagger and the hunger, I think you get a perfect marketer." In other words, while market leaders may have the confidence that comes with their position, challenger brands have the drive and adaptability that can propel them to new heights.
In this article, we'll explore the benefits of embracing the challenger mindset, from avoiding the pitfalls of complacency to connecting with underserved markets. We'll also examine real-world examples of companies that have leveraged their underdog status to achieve remarkable success. So buckle up and get ready to root for the underdogs.
Before we dig into it, make sure you check out the full episode of How the Fuck Did You Get that Job here:
Picture this: you're the top brand in your industry, with a loyal customer base and a seemingly unassailable market position. Life is good, right? Not so fast.
As Marissa Solis explains:
"If you're the leader and you're an established brand, first and foremost, it's hard to always stay at the top of your game. Because you're the leader. People are looking to you to trailblaze, and there's always someone behind you that's hungry, that wants to be that top position. So staying hungry when you're at the top is hard."
This is the paradox of market leadership: the very success that got you to the top can become a liability if it leads to complacency. When you're the one setting the pace, it's easy to become risk-averse and resistant to change. After all, why mess with a winning formula? But as the saying goes, the only constant in business is change, and companies that fail to innovate can quickly find themselves left behind.
Just look at Nokia, once the undisputed king of mobile phones. In 2007, Nokia controlled nearly 50% of the global smartphone market share. But the company failed to keep pace with the rapid advancements in smartphone technology, and by 2013, its market share had plummeted to just 3%. The lesson? Even the mightiest can fall if they don't stay hungry.
Another classic example is Kodak, which dominated the film photography industry for nearly a century. Despite inventing the digital camera in 1975, Kodak failed to anticipate the disruptive potential of digital photography, instead doubling down on its film business. By the time the company finally embraced digital, it was too late - Kodak filed for bankruptcy in 2012, a victim of its own failure to adapt.
So what's the alternative to the complacency trap? Embracing the challenger mindset.
Marissa Solis broke it down for us:
"I got the opportunity to do beverages at Pepsi, and that's a totally different mentality because at Pepsi, you're a challenger brand. You're not the market leader. So you're constantly, like, hungry to be there, hungry to be different. You're unapologetic, and it gives you a little bit of freedom."
This freedom is the secret weapon of challenger brands. Without the burden of market leadership, they have more room to take risks, innovate, and differentiate themselves from the competition. They can be nimble and responsive to changing consumer tastes, and they're not afraid to ruffle a few feathers.
Take Chobani, for example. When the company entered the U.S. yogurt market in 2007, it was a complete unknown going up against established giants like Yoplait and Dannon. But Chobani differentiated itself by introducing Greek yogurt to the mainstream American palate, and its high-protein, low-sugar formula quickly gained a devoted following. By 2012, Chobani had captured 17% of the U.S. yogurt market, and its success helped spark a Greek yogurt craze that transformed the industry.
Or consider Dollar Shave Club, the subscription razor service that took on the likes of Gillette with its irreverent marketing and direct-to-consumer business model. By focusing on affordability and convenience, Dollar Shave Club was able to capture a significant chunk of the men's grooming market, and in 2016, the company was acquired by Unilever for a cool $1 billion.
Another advantage of being a challenger brand? The ability to learn from the successes and failures of the market leader.
This second-mover advantage has been leveraged by some of the most successful companies in the world. Take Google, for example. When the company entered the search engine market in the late 1990s, it was going up against established players like Yahoo and Excite. But Google was able to learn from the shortcomings of its predecessors, developing a more user-friendly and efficient search algorithm that quickly became the gold standard.
Similarly, Amazon was not the first company to sell books online (that distinction goes to the now-defunct Book Stacks Unlimited, which launched in 1992). But by learning from the mistakes of early entrants and focusing relentlessly on customer experience, Amazon was able to become the dominant force in e-commerce.
The lesson here is that being first to market is not always an advantage. In fact, it can be a liability if it leads to complacency or a failure to anticipate changing consumer needs. By contrast, challenger brands that are able to learn from the leader and innovate in response to market trends can often leapfrog their way to success.
Challenger brands often succeed by targeting niche or underserved market segments that leaders overlook. This is a strategy that Marissa Solis honed during her time at PepsiCo, where she focused on engaging diverse communities.
"There are so many underserved communities that nobody's speaking to as brands. And that was a passion of mine. I did a lot of work with those communities at Pepsi, and I think the NFL saw that as a way that I could bring that link to those communities."
While the NFL itself may not be a challenger brand, it has recognized the importance of connecting with diverse audiences to sustain its growth. Under Solis’ leadership, the league has launched initiatives like Por La Cultura, a campaign to uplift the way Latinos watch and engage with football, and put a female flag football player front and center in its Super Bowl marketing. By authentically connecting with these underserved audiences, the NFL is expanding its fan base and positioning itself as a more inclusive and forward-thinking brand.
Challenger brands in other industries have found success by targeting specific demographics as well. Fenty Beauty, for example, disrupted the cosmetics industry by offering a wide range of foundation shades to accommodate diverse skin tones. By catering to traditionally underserved consumers, Fenty was able to generate $100 million in sales in its first 40 days.
The lesson here is that whether you're a challenger brand or an established leader, there's always an opportunity to grow by speaking to the audiences that others are ignoring. By authentically connecting with underserved markets, brands can tap into new sources of growth and build deeper, more meaningful relationships with their customers.
So what's the takeaway for brands looking to make their mark in a competitive marketplace? Embrace the challenger mindset. Don't be afraid to be different, to take risks, and to speak to the audiences that others are ignoring.
The most successful challenger brands are those that have the confidence to chart their own path, but also the humility to know that they can always be learning and improving. They're not content to simply follow the leader, but instead are constantly looking for ways to innovate and disrupt the status quo.
For market leaders, the lesson is to never get too comfortable. It's easy to fall into the trap of complacency when you're at the top, but as we've seen, even the most dominant brands can quickly lose their edge if they're not careful. To stay ahead of the curve, market leaders need to stay hungry, stay curious, and stay connected to their customers. They need to be willing to take risks and disrupt their own business models if necessary, rather than simply resting on their laurels.
At the same time, market leaders can also learn from the success of challenger brands. Leaders can gain valuable insights into emerging trends and shifting consumer preferences by paying attention to what upstarts in their industry are doing differently. They can then use this knowledge to inform their own strategies and stay one step ahead of the competition.
Ultimately, success in business is not about who has the most resources or the longest history. It's about who has the vision, the agility, and the tenacity to create something truly differentiated and valuable. It's about being willing to take bold risks, to speak to underserved audiences, and to constantly push the boundaries of what's possible.
In a world that's constantly changing, the brands that will thrive are those that embrace the challenger mindset - even if they're already at the top of their game. Because in the end, the only way to stay ahead is to keep moving forward, no matter how successful you've been in the past.
