This is Joel's humorous version of what Steve Blank refers to as "knowing your market type"[1]. Steve classifies them as new vs existing markets (there's also a third called "resegmented markets" but those just sound like existing markets to me).<p>He gave an example in one of his Haas lectures that I'll never forget of how disastrous it can be to mistake the two market types by comparing the marketing strategies of Blackberry vs Tivo.<p>Blackberry knew they were releasing advanced new products into a market of users that primarily only used pagers, so they described their product as a two-way pager, even though it's <i>nothing like a pager</i> under the hood. They described it in terms that people could instantly grok what the hell it was and early adopter usage was off the charts.[2]<p>If Tivo followed the same model, they should've described themselves as a tapeless VCR. But the company didn't just miss the obvious opportunity, they <i>actively avoided it</i> and even went so far as to ban the word VCR from any marketing, press releases or interviews. This came straight from the top, from the CEO, who believe that the VCR was primitive tech and the Tivo was so technically advanced as to be in a different class of gear.<p>Tivo got confused about what market they were in. They had great tech that was completely torpedoed by their marketing. As a result, Tivo's adoption curve was much slower, never got above a few million users, and didn't cross over into mainstream usage except as a verb.<p>[1] <a href="http://steveblank.com/2009/09/10/customer-development-manifesto-part-4/" rel="nofollow">http://steveblank.com/2009/09/10/customer-development-manife...</a><p>[2] <i>Bonus points for the self-taught MBA crowd</i>: go read Clayton Christensen's <i>The Innovator's Dilemma</i> and figure out why Blackberry wasn't able to sustain their lead.