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Stratagem 18:Feign Madness but Keep Your Balance



“At times, it is better to pretend to be foolish and do nothing than to brag about yourself and act recklessly. Be composed and plot secretly, like thunder clouds hiding themselves during winter only to bolt out when the time is right.”

—From The Thirty-Six Stratagems

Getting into the soft drink business seems a crazy idea. A swarm of small competitors battle each other in the shadow of two entrenched giants for a market that is stagnating. Any reasonable
industry analyst would steer you away from launching a new soda business. But Peter van Stolk was never educated in business and did not know how to analyze an industry. Nor is he a reasonable man.

Ironically, these two traits—making uneducated decisions and acting without reason—actually provided him with an effective competitive shield. By appearing “crazy,” he convinced his competitors to ignore him while he established his power base.

Van Stolk made a seemingly illogical decision. Previously, he had founded and grown a $6 million corporation in Western Canada that distributed beverages, including Just Pik’t Juices, Arizona
Iced Tea, and Thomas Kemper sodas. In 2000, he suddenly decided to sell this successful distribution business and form a company that would produce and market its own brand of soda.43 By doing so, he was trading a stable enterprise for the quixotic challenge of taking on Coca-Cola and PepsiCo.

Van Stolk’s new soda company immediately faced resistance. Distributors showed little interest in carrying his products as many were under pressure from large beverage companies to shun small
manufacturers. Even the few distributors who did decide to carry van Stolk’s soda had little reason to be proactive in selling the products.

To circumvent this resistance, van Stolk conducted a series of seemingly “crazy” strategic decisions that disengaged his company from the competition. Instead of fighting for shelf space, for example,
van Stolk created his own “shelves,” coolers emblazoned with his company’s brand. Instead of fighting for traditional retailers, he targeted locations that did not normally sell sodas: surfing, skating,and snowboarding shops; tattoo and piercing parlors; unique clothing retailers; and music stores.

To complement these unorthodox distribution choices, Jones Soda made equally “crazy” product decisions. The company dared to produce flavors that few competitors, and surely not conservative
Coca-Cola, would dare copy. It started to offer sodas called Blue Bubble Gum, Green Apple, Bada Bing! (cherry and loganberry juices), and D’Peach Mode. For Halloween, it rolls out its Candy Corn–flavored soda, and over Thanksgiving it offers Turkey and Gravy–flavored soda!

Jones Soda wraps these unorthodox drinks in equally unusual packaging. Fans began sending Jones Soda photographs of their babies and pets, asking that they consider using the images for
labels. This gave the company another “crazy” idea. It would print consumer-submitted photographs on all of its soda labels. This started a trend, and today customers vie to get their photos on the label. For example, someone can submit a picture of her cat on jonessoda.com, and it will be included in a consumer-judged photo contest. If selected, she may find her cat’s image on Jones Soda labels at her local store and around the country.

If you want to avoid the contest and ensure your picture makes it onto a bottle, you can even order customized soda on myjones.com. If you want a case of Turkey and Gravy soda with your family
photo on it to serve over Thanksgiving, you can get it for $50. The company protected this “customization” service and now holds the patent on customizing branded merchandising over a computer network. This process has created an intense sense of brand loyalty. As van Stolk explains, “People get fired up about Jones because it’s theirs. It’s not my soda. When you buy a bottle of Jones Soda there is a person’s name on the bottle who took the photo.”44

Van Stolk empowers his “crazy” distribution and product decisions with equally unusual marketing ones. On one April Fool’s Day, for example, Jones Soda issued a false press release announcing
they were being acquired by John Deere, the tractor company. The release claimed John Deere wanted a weed-flavored soda. This antic stirred up Jones Soda drinkers and drew a lot of attention. Some were amused, others confused, but most at least heard about it.

Van Stolk’s latest idea is create a Board of Directors composed exclusively of children. His chair would be a teenager. While van Stolk admits some regard the idea as “crazy,” he thinks allowing
seventy-year-old chairpersons to make marketing decisions, as most large companies do, is much  crazier.

Jones Soda’s unorthodox strategies indeed attract consumers, but more important, they help deflect the competition. Faced with Jones Soda’s unusual tactics, most competitors discount the company as a threat too odd and indirect to warrant a response. Yet, countless companies have grown strong under the protective barrier of a “crazy” reputation. Think how Richard Branson and Rupert Murdoch continually build competitive companies under the guise of madness.

The Jones Soda story is short and the company’s longevity yet to be proven, but its growth is impressive. Now a publicly traded company, it is growing at 30 percent per year while its stock price has soared 250 percent over the past two years.45

If the company continues to use its “crazy” reputation to deflect any serious competitive response, it should continue to grow. As van Stolk points out, “There’s so much room to grow—Coke and Pepsi are so big—we’ve got a long way to go before anyone notices.”46

Virgin’s Crazy Telephone Call to Boeing

In 1984, when the Virgin Group announced plans to enter the airline business, most people wrote off the idea. Many airlines had tried to compete with British Airways, but none had had the financing to persevere against the powerful national airline.

Most companies would fight such pessimism with arguments grounded in rational analysis and strategic logic. However, Richard Branson, the head of Virgin, appeared to do exactly the opposite.
He cultivated a seemingly amateurish story about how he came up with his idea to compete in the airline business: An acquaintance happened to give him a proposal for a new airline. Branson called People’s Express (British Airway’s competition) over the weekend and was encouraged to find they never answered the phone. This pointed to an opportunity. On Monday, he cold-called Boeing to inquire about leasing a used plane. With that he “had done all the market research [he] felt [he] needed and had made up [his] mind.”47

Virgin further bolstered an offbeat image with a series of outlandish publicity events. For example, for Virgin Atlantic’s maiden transatlantic flight, Branson dressed up as a pirate and filled the plane with champagne and music stars.

These tactics benefited Virgin in more ways than one. They helped build awareness and endearment among the flying public. But the tactics also helped keep British Airways off-guard. It
was unclear, for example, how seriously the national airline should take Virgin. Would Virgin’s “crazy” image, which contrasted starkly with British Airway’s buttoned-up reputation, make Virgin
more or less threatening than other start-ups? British Airways ultimately took Virgin’s threat seriously and fought back, using all the strength it had. It is difficult to know for sure, but many believe that Virgin’s unorthodox approach created a gap or softening in British Airway’s response, within which Virgin built momentum. As the Economist stated in an article outlining the folly of Virgin’s entry into the rail business, “To be fair, back in 1984 Mr Branson’s entry into the airline business also seemed both a crazy gamble and a threat to his brand.”48

Madness Creates Opportunity

In AD 249, General Cao Shuang, who had invested ten years securing near-complete control over his state, lost his power in just four days when he turned his back on a seemingly weak adversary.

Cao Shuang and his adversary, Sima Yi, were officials of the Wei Empire. When the emperor died and enthroned his young son to replace him, both Cao Shuang and Sima Yi were charged with looking after the young prince until he reached sufficient age to rule.

Although they initially enjoyed equal power, Cao Shuang ultimately took power from Sima Yi by demanding complete control over the military. Marginalized, Sima Yi feared that Cao Shuang
would soon kill him. So he acted crazy. When one of Cao Shuang’s henchmen came to visit Sima Yi, he acted sick and senile. He spilled soup on his collar to appear weak. He pretended to misunderstand their conversation, to appear senile.

Cao Shuang concluded that Sima Yi posed no threat. He let Sima Yi live and eventually slip from his mind. No longer under heavy scrutiny, Sima Yi waited patiently for an opening. His opportunity came when Cao Shuang left the capital with the young emperor to visit the imperial tombs. Sima Yi quickly gathered his sons and followers and staged a coup. Four days later, Sima Yi took control of Wei and had Cao Shuang executed.

By feigning madness, you can bide your time in relative anonymity and wait for the right moment to act.

“Make use of folly. Even the wisest person sometimes puts this piece into play, and there are occasions when the greatest knowledge lies in appearing to have none.”

—Baltasar Gracian, The Art of Worldly Wisdom49

Seizing the Opportunity to Take an “Ally”

In 770 BC, the state of Song was under siege by an alliance of opposing states. The state of Chen led this alliance. In defense, Song implemented the stratagem of Besiege Wei to rescue Zhao. It attacked Chen’s capital, forcing Chen’s aggressors to call off their siege and leave to defend their homes. Through cunning application of this stratagem, Song freed itself from the threat.

On its return home, the Song army passed through a small state called Tai. Tai had refused to support Song’s defense, so Song decided to take the Tai capital in revenge. The Song army surrounded Tai’s stronghold and prepared for what promised to be almost certain victory over the weaker Tai state. As it turned out, however, neither state would be victorious.

Tai, facing certain defeat, sent an appeal to Chen for help. When a few days later the Chen army was seen approaching, the Song army called off its siege and hurried home. The Tai army rejoiced. The presence of Chen’s powerful army had saved them. The Tai king opened his city gates to welcome the Chen duke and his army.

The Chen duke faced an unexpected opportunity. He stood with his army in front of the open city gates of a strategically important state (Tai was in proximity to Song). Knowing that an attack on Tai would provoke little or no resistance, he marched his soldiers into the welcoming walls of the Tai capital, kidnapped the Tai king, and took over the city.

Just as the traveler in the Chinese folktale took advantage of an inattentive shepherd, Sony took advantage of an inactive RCA,and Apple took advantage of a conflicted Sony, Chen took advantage of an adversary that it knew could not defend itself. This is the essence of the stratagem. When your adversary is unlikely to react, seize the moment.

“8Ps” of StrategyOpportunity
for Disruption
Recommended Leverage Points
Position- The farmers, individual and corporate, that you are targeting.

- The need of the agricultural industry that you seek to fill.
3- What technologies do you control that can help you tap into market
segments that you previously thought unreachable?

- What are the potential business alliances you could think about with key players in the segment to serve your customers with integrated solutions? (Serving customers with more integrated solutions example: serving farmers with fertilizers, crop protection and other).
Product- The products you offer, and the characteristics that affect their value to customers.

- The technology you develop for producing those products.
8- What moves are your organization taking to implement Big Data and analytics to your operations? What IoT and blockchain applications can you use?

- What tools and technology could you utilize or develop to improve food quality, traceability, and

- How can you develop a more sustainable production model to accommodate constraints on arable

- What is the future business model needed to serve new differentiated products to your customers?
Promotion- How you connect with farmers and consumers across a variety of locations and industries.
- How to make consumers, producers, and other stakeholders aware of your products and services.
8- How are you connecting your product with individual and corporate farms who could utilize it?
- How could you anticipate market and customer needs to make customers interested in accessing your differentiated products?
PriceHow consumers and other members of the agricultural supply chain pay for access to agricultural products.7- What elements of value comprise your pricing? How do each of those elements satisfy the varying needs of your customers?
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- How are you adapting your operations and supply chain to accommodate consumers’ desire for proximity to the food they eat?
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accessible to customers/agile supply chain?
- Have you considered urbanization as a part of your growth strategy?
- How your food satisfies the needs and desires of your customer.
- How the services you provide to agribusiness fulfill their needs.
9- Where does your food rate on a taste, appearance, and freshness
- Could the services you provide to companies and farms in the agriculture industry be expanded to meet more needs?
- What senses does your food affect besides hunger? How does your
customer extract value from your food in addition to consumption?
Processes- Guiding your food production operations in a manner cognizant of social pressure.8- How can you manage the supply chain differently to improve traceability and reduce waste?
- How can you innovate systems in production, processing, storing, shipping, retailing, etc.?
- What are new capabilities to increase sustainability (impact on the environment, or ESG) components?
People- The choices you make regarding hiring, organizing, and incentivizing your people and your culture.- How are you leveraging the agricultural experience of your staff bottom-up to achieve your vision?
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