Now that the presidential election is over, it is a good time to reflect on what we learned from the winners and losers. Presidential elections are very much like the launch of a new company. Regardless of whom you voted for, you can learn a lot about entrepreneurship and business-plan development. A presidential race has the following elements:
- Problem identification
- Solution recommendation
- Market identification
- Marketing strategy
- Sales strategy and implementation
- Competitive analysis
- Strengths and weakness analysis
- Management team
- Raising capital
- Managing cash flow
People don't argue and fight over whether Coke is better than Pepsi, but people do stop talking to friends whose political viewpoints are different. Yet, for all of the rhetoric and passion, politics is no different than any other business, and the winners are usually the ones who are best able to communicate their message and execute their strategy.
Looking at a run at the presidency as a startup venture, you will have a better understanding of why Barack Obama beat John McCain and how to apply lessons learned from the campaign to your own business.
: The Obama team pretty much identified the problem that Americans (consumers) wanted solved: the economy. They wanted a better economy. There were secondary issues like the war and health care, but, basically, it was about jobs. The McCain group identified multiple problems and tried to tell the consumer that McCain could solve all of them.
: The McCain team came up with a variety of solutions, but the consumer was confused by them. The Obama team stuck to lower taxes and protecting jobs. Forget about who is right. The lesson learned is about keeping the message simple.
: Both groups were good at identifying their market. The problem for McCain was that he narrowed his market so much that Obama could pick up some customers who felt the McCain product didn't fit them. It wasn't necessarily that Obama's product was better, but it appeared that McCain was targeting a specific market with his solution.
: The Obama strategy was to mass-market its product with additional dollars going to working-class whites, who weren't sure the product was for them. McCain identified a specific market: white, religious and with a dislike for government involvement and intervention. Obama believed in spending as much as possible to grab all of the market share and turning that market share, once captured, into captured clients.
Sales strategy and implementation
: Obama learned that the more salespeople you have on the street, the greater chance you have of picking up sales. He flooded the market. McCain was selective, believing he could build the more powerful company by focusing on one specific audience. In a way, McCain was like Apple selling a more expensive computer, banking on a more loyal class of buyers. Obama was like a PC shop, thinking he would make it cheap enough so everyone could afford it.
Competitive analysis, strengths and weakness analysis
: Each group looked focused on its perceived strengths, such as McCain's experience and the sense that the buyer knows what he is getting. No surprises. Obama was selling a new, improved product. They each looked for weaknesses in the other's plans, character and personal affiliations.
: The citizens of the U.S. are like angel investors: We make our decisions on whether to invest, in this case by casting a vote, based on experience, communication style, vision and gut instinct. As much as people knocked Sarah Palin's lack of experience, the fact is that she had the most managerial experience of the four. Joe Biden had the most knowledge in foreign affairs. McCain is an expert in warfare, and Obama has great experience in dealing with economic development and intercity problems. McCain and Palin may have lost because their expertise may have been seen as a mismatch with the needs of the people.
: Presidential campaigns, like new-company launches, require a lot of money to develop infrastructure, pay for product development (position papers by scholars) and marketing (television, radio, Internet and direct mail).
Managing cash flow
: In business, cash is king! Like in most capitalist wars, the team with the most money has the greatest advantage. Obama raised three times as much and, in some key markets, spent six times as much as McCain. You tell people the same message over and over and eventually they believe it.
Finally, when making your pitch to investor angels and prospective customers, remember that negative advertising tends to backfire. McCain-Palin probably spent too much of their precious time and resources convincing us that Obama-Biden was a poor investment instead of telling us why they were a better investment or product.
Marc Kramer, a serial entrepreneur, is the author of five books and is an instructor at the University of Pennsylvania's Wharton's Global Consulting Practicum, where he serves as Country Manager for Chile.