The Hierarchy of Marketplaces - Level 3: Dominating the Map

The Hierarchy of Marketplaces - Level 3: Dominating the Map

In the world of marketplaces, it's not just about being number one. It's about being number one by a wide margin. This is what Level 3 is all about. At this stage, your cohorts are performing stronger and stronger, and you are experiencing significant organic growth. To reach Level 3, there are three key steps to take.

Firstly, you need to outrun your competition and become the clear leader in your original market or category. Think of it as your thimble. This means surpassing your competitors by a wide margin and establishing yourself as the go-to platform in your industry. This level of dominance sets the foundation for further expansion and growth.

The second step in Level 3 is expanding beyond your thimble. It's about broadening the buyer use cases you solve for. This means identifying new opportunities and finding ways to cater to a wider range of customer needs. However, it's crucial to approach this expansion in a way that is consistent with your brand and mission. You don't want to stray too far from your core offering and risk diluting your value proposition.

Finally, Level 3 is about taking the playbooks you've honed in Level 1 and 2 and using them to pursue multi-threaded domination of the map. This means leveraging your expertise and success in one market to expand into other related markets or verticals. By applying the strategies and tactics that worked for you in your original market, you can achieve a higher level of dominance across multiple fronts.

Now, let's delve into the psychology behind the mere exposure effect. Researchers have discovered that we tend to prefer things that we've seen before over new things. This phenomenon, known as the mere exposure effect, suggests that the more frequently we are exposed to something, the more we like it. What's fascinating is that this effect can occur even if we don't consciously remember seeing the object before. It seems that our subconscious mind is at work here.

Back in 1968, social psychologist Robert Zajonc conducted a groundbreaking study on the mere exposure effect. He found that people didn't need to experience a reward or positive outcome while being exposed to an object to develop a liking for it. Simply being exposed to the object was enough to create a preference. This raises interesting questions about human desire and the social process of mimetic desire. Do we desire things because we've been exposed to them repeatedly, even if they don't necessarily bring us any direct benefit?

The mere exposure effect is not limited to humans. Studies have shown that it occurs in both human research participants and non-human animals. Even animals seem to develop a preference for things they've been exposed to multiple times. Additionally, research has shown that subliminally showing participants a set of images can impact their preferences and moods. However, it's worth noting that the mere exposure effect doesn't seem to apply to sounds. Repeated exposure to sounds doesn't elicit the same preference as repeated exposure to visual stimuli.

Interestingly, while a smaller number of repeated exposures can make us like something more, continued exposure can lead to a decrease in preference. There is a point at which familiarity breeds contempt. Think about those TV commercials that you used to find amusing but eventually grew tired of. The same principle applies here. Our initial liking for something can diminish if we are exposed to it too frequently.

So, why does the mere exposure effect occur? One explanation is uncertainty reduction. As humans, we are naturally cautious around new things because they could pose a threat to us. However, when we repeatedly see the same thing and nothing bad happens, we start to realize that there is nothing to fear. Our uncertainty diminishes, and we become more comfortable and accepting of the familiar.

Another factor at play is perceptual fluency. When we've seen something before, it becomes easier for us to understand and interpret it. Familiarity breeds a sense of comfort and familiarity, making it more appealing to us. We tend to gravitate towards things that we already know and understand.

Now that we understand the psychology behind the mere exposure effect, how can we apply this knowledge to our marketplace strategies? Here are three actionable pieces of advice:

1. Leverage the power of repetition: Incorporate elements of your brand or platform that are easily recognizable and repeatedly expose your target audience to them. This will help create a sense of familiarity and build trust over time.

2. Expand strategically: When broadening your offerings or entering new markets, ensure that you stay true to your brand identity. The mere exposure effect works best when the exposure is consistent and aligned with your mission. Don't make drastic shifts that could confuse or alienate your existing customer base.

3. Balance frequency and variety: While repetition is effective, be mindful of overexposure. Too much of a good thing can lead to diminishing returns. Find the right balance between exposing your audience to your brand and giving them enough variety to maintain interest and engagement.

In conclusion, reaching Level 3 in the hierarchy of marketplaces requires surpassing your competitors by a wide margin, expanding beyond your original market, and pursuing multi-threaded domination of the map. Understanding the mere exposure effect can help us create strategies that leverage familiarity and build preference among our target audience. By incorporating repetition, staying true to our brand, and finding the right balance between exposure and variety, we can establish ourselves as the dominant force in our industry.