4.5.1 Surface Area

The seven keys to choosing opportunities on the basis of their size.

Art of War Quote: 

"Victory comes from correctly using both large and small forces."
Sun Tzu's The Art of War 3:5:3

Perspective: 

"So never lose an opportunity of urging a practical beginning, however small, for it is wonderful how often in such matters the mustard-seed germinates and roots itself." Florence Nightingale

General Principle: 

Large and small opportunities offer very different types of advantages.

Situation: 

Area measures the apparent size of an opportunity. We mistakenly think that the bigger the opportunity, the more likely it is to lead to success. However, the advantages coming from the size of an opportunity can be very misleading. We think that we need a "big break" to be successful. We think that big breaks depend solely upon luck. However, the advantages of big opportunities often disguise extremely costly dangers. We can easily mistake the size of the territory in which the opportunity arises for the space within the opportunity itself.

Opportunity: 

As we learn more about gauging the size of an opportunity, picking high-opportunity opportunities become much easier. Once we understand what the "size" on an opportunity really means, we can gauge how well a given opportunity fits our unique abilities to utilize it (3.4.2 Opportunity Fit ). With the right perspective on opportunity size, we avoid costly mistakes regarding picking opportunities that seem closer than they are because of their size (4.4 Strategic Distance). One of the most important ways we benchmark opportunities is identifying those that are too spread out and those that are too confined (4.6.1 Extremes of Area). 

Key Methods: 

 Below are the ideas that describe the use of opportunity area in comparing the potential of opportunities.

  1. Opportunity area is different from opportunity distance. Opportunity area evaluates the breadth and range of territory that a future position encompasses. The space covered by position is different from that separating positions. Area is the extent, range, or and capacity within an opportunity, the expanse of the region it covers. Distance is the space separating different positions, the investment that must be made to explore an opportunity from an existing position. Opportunity area contains and covers distance to the extent that opportunities exist as opening between existing positions. Area and distance are similar, existing both in physical and intellectual space and measured in differences. (4.4 Strategic Distance).
  2. Opportunity area measures the range of physical and intellectual capacities. Positions exist both on physical and mental landscapes. We can measure physical area in the feet and miles, meters and kilometers an opportunity covers. We measure intellectual area in the range of knowledge and skills an opportunity requires to address. An opportunity is an opening and physical space and intellectual space both measure the extent or capacity of that opening. These two aspects of area stem from the dual objective and subjective nature of positions (1.2 Objective and Subjective Positions).
  3. The area of the competitive landscape is measured by the number of optional positions available. Since a position is a combination of the characteristics of mission, climate, ground, command, and methods, potential positions on a competitive landscape is a combination of those characteristics. As the possible characteristics get multiplied together defining optional positions, this number of options grows very large. The area of an given opportunity or opening describes a small subset of the competitive landscape with a more limited number of combination of characteristics (1.3 Elemental Analysis).
  4. The larger the opportunity area, the more resources required to fill it. We can often see the size of an opportunity more easily if we think about the resources required to pursue it. We explore opportunities with the excess resources that we do not need for maintaining our current position. Physical space must be traveled. Intellectual space must be covered. The larger the area, the more needs, time, materials, decisions, and skills that opportunity requires required to cover it. "Big" opportunity areas require more range and depth of resources than small opportunity areas (3.4.2 Opportunity Fit ).
  5. Small areas of opportunities are much more common than large ones. Opportunities are openings, often in the form of unsatisfied needs. The vast majority of opportunities exist as empty spaces between existing positions. The spaces between large competitors tend to be filled by smaller competitors and the spaces between those smaller competitors are what remain. This is why small openings are much more common than large ones. Large areas of opening only exist on the periphery of most existing positions, created as new areas of opportunity are opened up or created by new methods (3.2 Opportunity Creation).
  6. Small opportunities can eventually lead to larger ones. Since opportunities are unmet needs, one unmet need can lead to another opportunity in a chain. Like following a vein of gold in a mine, small threads of opportunity can lead to gradually large, unrecognized areas of need. Working on the periphery of existing positions can lead to the periphery of all existing positions (3.7 Defining the Ground).
  7. The larger the opportunity area, the more probably a partial fit becomes. Opportunities are openings that we can fill and needs that we can satisfy. Opportunities have a shape and size and our resources have a shape and size. The larger the area of an opportunity, the more likely it is that our available resources will fit part of that opportunity. Our resources are always limited (3.1.1 Resource Limitations).
  8. Large and unfilled opportunities attract more competition. While all opportunities are difficult to see, larger opportunities are easier to see than small ones. Because of their size, they can be seen at a greater distance. Once we begin to fill an opening, it instantly becomes easier for others to see. Since larger opportunities are more difficult for us to fill, when we pursue large opportunities, we expose them to other potential competitors (3.2.2 Opportunity Invisibility). 

Illustration: 

Let us illustrate these principles discussing the choosing of a geographically large sales territory versus a smaller one. This is an interesting problem because salespeople often prefer large territories because they think that they hold more potential prospects.

  1. Opportunity area is different from opportunity distance. The area a new sales territory covers is different from the distance it takes to get to that territory. Taking over a distant territory may require a commute or even moving to even get to it. Traveling within the territory is different than getting to it.
  2. Opportunity area measures the range of physical and intellectual capacities. A geographically large territory may or may not contain more prospects but always contains more distance, the space between the prospect. A better measure for a sales territory is the population within it. Another way to measure the intellectual extent of a territory is the range of products that a salesperson must learn to represent or the number of different types of businesses he must address. Sales territory can also be measured in terms of the size of the customers it addresses. A geographically large territory can contain only a few large customers while a geographically small territory can contain a large number of small customers.
  3. The area of the competitive landscape is measured by the number of optional positions available. The size of a sale territory can be measured by the physical territory it covers, by the number of prospects within it, by the number of different products sold within it, by the number of orders it generates, by its total sales volume, by the sales commission it generates, and on. While some of these characteristics may correlate with one another, others do not. For example, a territory that generates the most sales volume could have a few very large customers rather than the most customers. 
  4. The larger the opportunity area, the more resources required to fill it. It takes more time to cover a geographically or demographically large territory. The larger the territory, the less frequent the visits to potential prospects and existing customers. The more products and types of business a territory covers, the greater the range of sales knowledge that is required on the part of the salesperson.
  5. Small areas of opportunities are much more common than large ones. As a market and company matures, sales territories tend to get whittled down, smaller and smaller. Large sales territories are more common in new, unproven companies and industries.
  6. Small opportunities can eventually lead to larger ones. Success in a small territory can lead to a large one. Success in selling small customers can lead to selling large ones.
  7. The larger the opportunity area, the more probably a partial fit becomes. Salespeople offering new technologies open up large areas of application. They tend to find more diverse areas of applications, most of which offer a partial solution and none of which offer a complete solution.
  8. Large and unfilled opportunities attract more competition. If a given salesperson is successful selling to certain new markets, more salespeople will pursue that market. Many poorly fitting applications of new technology tend to attract those offering better fitting applications.
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