How to Make your Market-leading Competition . . . History

Rahul Raj, founder and CMO of 5&Vine based in Toronto, Canada.

Rahul Raj is founder and CMO of 5&Vine, a fractional CMO and marketing agency that identifies industry incumbents’ vulnerabilities, market changes, and technological opportunities to enable startup brands to challenge and overtake established brands. 

The agency focuses on challenger brands that have both economic and social goals, e.g., increasing financial literacy, addressing discrimination, or making organic food more accessible to the masses. 

Before starting 5&Vine, Raj worked at a Canadian thermostat startup, Ecobee. The big-name competitors, Honeywell and Nest, owned the market. Their vulnerability: single location thermostats did not address the comfort of people in “different” parts of their homes. Ecobee developed a system of individual room sensors that identified temperature and occupancy so that people could be comfortable where they were, instead of only being comfortable in the “single thermostat” hallway. The technological opportunity, Bluetooth, enabled sensors located in different rooms to communicate to the main thermostat without the need for “dropping wires.”

The company had no money, no “presence,” and no awareness. It invested heavily in customer support, won converts, and curated reviews. Ecobee had 10% of the five-star reviews of big-name competitor Nest . . . with only 0.1% of the market share – which made Ecobee larger than they actually were. 

Faced with a profound family tragedy, Rahul left Ecobee, interviewed over 200 companies, received 10 offers, and decided he wanted to “date.” With each company, he agreed to work for anywhere from a week to a month which de-risked the hiring process for both sides. He so loved working as a “fractional CMO” that he professionalized his “dating” and launched a fractional CMO agency.

Rahul’s “sweet spot” is working with referred clients are those who are “pre Series A to just post Series B” – those who have the financial resources to invest in marketing and are highly motivated to grow.

In keeping with his “dating” philosophy, Rahul typically works for a company for up to three days to ensure there is a personal and intellectual fit. If both Rahul and the customer are satisfied, they write a formal contract. Of the thirty or so companies 5&Vine has worked with, the agency has taken a significantly reduced financial compensation from five or six – in exchange for equity or options in the client organization.

Rahul has developed a formalized process to discern vulnerabilities that open opportunities for his startup clients to beat more-established companies.

  1. Use the web to research the big company’s product
  2. Compare customer reviews to the company’s product claims
  3. Buy and use the product and compare your experience to the company claims and to customer’s reviews.

Answer the questions:

  1. What are people yearning for?
  2. What is being under-delivered, and 
  3. What opportunity exists for your startup to come up with a powerful product that will prove a market winner?

In this interview, he also notes that it is helpful to determine what has changed over time. . . and what technologies could be applied to solve problems.

Rahul spoke at HubSpot’s 2020 Inbound Conference on Go-To-Market Strategies for Startups: A Framework + Insights from One Challenger Brand to Another.

He can be found on his agency’s website at 5andVine.