Want To Capture Attention? Start By Kicking The Bucket
So, a buddy of mine had this interview question he loved to throw at unsuspecting candidates.
"Imagine you are a baseball player...tie game, bottom of the ninth, teammate on first. The manager's strategy is to have the player at bat bunt the runner to second and then have the player on deck single him home..."
The question... "which batter would you prefer to be?"
Of course, the question was designed as a total trap.
If you say, "I want to be the guy that knocks in the winning run," you would be chastised for not being a team player. If you said that you wanted to be the guy to bunt the runner over, then you would get ridiculed for being unable to handle a pressure situation.
Like the, “how many taxis are there in New York City,” question – I am sure in his mind there was some insightful conclusion to draw from the response - I just can’t tell you what it is.
I bring this up because I got hit by a similar no-win question the other day. Client asks, "how many other long / short managers have you marketed? And how can you possibly say anything different about us and avoid a conflict of interest?"
Had I said that we never had worked with a long / short manager before, then he would have immediately come back that we lacked experience. And had I said that we have worked with dozens of other long / short funds, then his assumption was that we are unlikely to differentiate him.
And that’s just silly…
There are literally thousands of long / short managers globally. Does it really make sense to paint them all with the same brush? Really - how hard is it to differentiate say, a $2 billion U.S. centric, fundamentally-driven, large cap manager with a $100mm model driven, emerging markets manager? Or a niche TMT fund run by a former banker…?
But the differentiation goes far beyond strategy “bucket”. The “bucket” is not what you are selling. What you are selling is actually a value proposition. The tone you use and how you position that value proposition is what you should think of as “marketing”.
Your value proposition is a combination of your core beliefs – the philosophies that drive you, along with those one or two factors that truly differentiate your offering (NOT the seven things on the typical “Edge” slide). This may be completely unrelated to your strategy.
Look at John Bogle – not a hedge fund manager, but a great case study. His value proposition couldn’t have been more simple (I guess in hindsight, at least). An ardent belief that passive, low-cost, index funds are superior to active managers over time. That's it!
He used that concept to build one of the largest mutual funds in the world and undoubtedly paved the way for ETF acceptance decades later.
So, to be clear, I’m not saying that a value proposition will make an allocator re-think his process. After all, bucketing just makes an allocator’s job easier by providing a framework to base core assumptions and match expertise.
But like any generalization, if you allow your “bucket” to define you, you give yourself almost no chance to capture attention and differentiate yourself.
Apple didn’t invent the MP3 format. It didn’t even invent the portable media player. So, how did Apple ensure the iPod didn’t get bucketed as part of an already crowded “space”. By presenting a completely different value proposition. And it did it in just six words…
”A thousand songs in your pocket.”
By JD David