We expect to pay for…
- Food, clothes, electronics, most physical products.
- Housing and insurance.
- Phone service, Internet service, electricity.
- Labor and professional advice.
We don’t expect to pay for air, freedom, friendship, love, personal advice, etc.
To enter a new market, you need to understand who pays who for what. If you know what people already expect to pay for in your industry, you know the needs and the budgets already assigned.
Although these needs are not set in stone and budgets can be created (we learned to pay for bottled water…), they are expected and easier to fulfill.
Creating something new for a new market with a new business model is dangerous. Feasible, but dangerous. Expectations and comparables serve a purpose.
I didn’t know how to write music when I started playing an instrument. By studying patterns from popular songs, I learned to write my own.
I didn’t know how to design products until I started taking existing systems apart looking for patterns and intent behind design decisions. Now, most of my earnings come from designing things.
Most of everything follows a recipe. Understand how patterns fit together and you’ll be well on your way to understanding the structure of success.
Ask yourself Why things were made a certain way. Keep asking the question until you reach the core (5 Whys).
Logic has it that, if you can take something apart, you should be able to put it back together. But, for this to work, you need to have understanding. Being able to take a car apart won’t necessarily make you a great car engineer.
No matter what kind of product you sell, you’ll always have – sooner or later – competitors. You get one chance to decide which competitors you want when you decide which business to go in. But, after that…
Whether you wish to monitor your competitors closely or not, it’s important to hold one above the rest.
Having a strong competitor forces you to exceed yourself. It helps rally the troops and fuels the competitive instinct in all.
Apple wouldn’t have been Apple without Microsoft, Gretzky wouldn’t have been as good without Messier, Batman wouldn’t have been the same without the Joker… and the United-States wouldn’t have become so powerful without an enemy like the Soviet Union.
Strong competitors keep you on your toes. Pick the right comparatives. Whether you like your competitors or not, they serve a purpose.
Businesses compete against other businesses, substitute products, indifference, noise and businesses not yet created. Many unknowns, many external factors.
Branded experiences like games, music, movies and art compete against market noise. They have all they need to create excellence; popularity (or the lack of) never takes away from the quality and the uniqueness of the product.
As there will never be too many great games, albums, movies or paintings, there will never be too many great brands.
This is what companies like Apple understood.
Apple no longer competes against Dell, LG or Lenovo; it took itself out of the equation. People buy Apple products for the brand and the experience; it matters very little what Dell throws at Apple customers.
Great brands break the competitive equation. Your company can too. How can your company tweak its internal factors to create a unique voice in the market?
It’s easier to ride a wave than to set one in motion.
Meaning… your company may be better off creating offers that complement the market’s big player’s than trying to create trends and slice the market in a different way.
Building in the shadows of large companies can be very interesting but, it requires a different approach to identifying market opportunities.
If your business is able to identify gaps in large companies’ portfolios, understand where they’re heading (what they will and will not build) and create the toys or features they’ll want to play with in the future, you can be very successful.
It can be risky business – maybe you’re wrong – but, if you can:
- Demonstrate interest (or traction) for something they’re lacking
- Create something of value that’s hard to imitate
- Optional – Create a bidding war with their competitors
…you just might get bought out.
At a startup incubation event last Fall, I was pitching a product I was working on. It was going well, investors were asking a lot of questions; I was in the zone :). Until, another participant said:
You don’t know XYZ… They do something like that…
To him, this was a deal-breaker. You can’t do something that someone is already partly doing!
But, starting a business is not like inventing the telephone; you don’t have to be first. In fact, being first is often a disadvantage… everyone gets a chance to poke holes in your positioning.
If you really had to reinvent the wheel to go in business, there would be no Toyota, no Google or no Facebook. None of them were first-movers but, they innovated and took control of the market.
Truth is, you should not create a product if there’s no competition. If there really is no competition, spend time and ask yourself why…
Question: Have you ever been confronted with the virgin market myth?
To some extent, cold calls are the junk mail of the telephone – you don’t really want them and they’re rarely targeted at you.
But, even if cold calls are disliked and sometimes considered bad practice, marketers and sales people keep on calling.
Here’s why… beyond possibly leading to sales or leads, doing cold calls is the fastest way to iterate and improve a value proposition (what you sell and how you sell it).
Only direct interactions (calls or face to face) can give you the real pulse. By listening to your prospects’ intonations, reactions, questions and comments, you’ll get much further, faster, than any survey or data set will take you.
It’s hard (really hard) but, calling targeted people out of the blue is definitely worth the stress and trouble.
If you watch someone learn how to play hockey, you’ll notice a tendency to shoot on the opposing goaltender even when the net is half-empty…
If you follow someone setting up his first business, you’ll notice a tendency to try to do the same as the competition…
But, unlike in hockey where reflexes and adrenaline have their use, starting a business actually gives businessmen time to think (or to evaluate the reverse of what they think).
Takes a certain amount of unwiring to start thinking in terms of strategic opportunities but, the market already has enough of the same thing.
So, instead of thinking of matching the competition first, focus on being different first. Not being able to see the gaps in a market is a sure sign of lack of research and market awareness.