Good business ideas are a dime a dozen. A study that analysed several hundred startups to determine why they succeeded/failed found that the uniqueness and quality of the idea was only the third most important reason for success. What ranked first and second? Timing and execution. Timing is out of our hands (as it’s mainly driven by luck) but we can always control how we execute.
Rather than innovating with our ideas, we can choose to innovate our execution by changing how an existing idea is implemented. By doing this, we can be original and at the same time, more likely to succeed. Here’s five different ways to do this:
Choose a different business model/pricing strategy
The same product/service can generate revenue/a profit in many different ways.
Where one business might insist on selling directly to the customer, another might use franchisees/affiliates. Similar businesses could prefer brick-and-mortar stores while you’d ideally dominate via e-Commerce. One SaaS could monetise via subscription-based pricing while another may prefer going the freemium route and monetising with advertisements.
This was how Spotify succeeded. Spotify wasn’t the first to do online music streaming. Services like iTunes and Napster already existed before. The difference was Spotify used a paid subscription model + advertising to free users while paying out royalties and license fees to artists/labels in proportion to listenership. At the same time, iTunes was only offering outright music purchases and Napster offered only paid subscriptions (with a legally questionable business model).
Use different marketing channels
Marketing channels are how your target audience comes across your product/service offering. No business can master every single channel. So there’s always an opportunity to take a similar business and market it a different way. If a business gets its users mainly through Facebook Ads, try content marketing through blog posts and social media. If being on page 1 on Google is their main source of leads, try sponsoring events, clubs or influencers.
For example, Gymshark wasn’t the first to enter the fitness apparel game. They grew by using social media and influencer marketing to create a loyal community around their products. Compared to brands like Nike and Adidas which focused on other channels like TV adverts, brick-and-mortar stores and sports sponsorships, Gymshark went a different route and succeeded in creating a billion-dollar brand in a market full of competition.
Niche down and position differently
Large businesses often cater to large markets where a lot of customers with different needs all use the same product/service. More often than not, you can break off a chunk of their market to focus on pleasing one type of customer better than the larger business can.
There’s a process for this. It’s called segmentation-targeting-positioning.
First, you segment the market into measurable, accessible and large enough audiences. Next, you target one specific segment (or niche) of the market that you want to focus on serving with your product/service offering. Finally, you determine how you’ll position your offering to your ideal niche to beat the competition or make them irrelevant.
If another business offers digital marketing for dentists, you can niche down to provide Facebook Ads management to orthodontists in Australia. In the same way, if you’re competing with a SaaS that provides scheduling for 5 different kinds of social media, you can focus on specializing in Twitter (or Instagram or any of the others).
By niching down, your value proposition is clearer to your target customer than a one-size-fits-all approach that a larger business may offer.
Note – niching down (or unbundling) works great as a market entry strategy but not an expansion strategy
Bundle related offerings
In a similar way, you could potentially combine two smaller but related products/services into one to synergistically offer more than they could separately. This is known as bundling – combining multiple smaller offers into a single, large offer to create a higher perceived value to the customer.
For instance, if a furniture store refers customers to external sources of financing, you can bundle selling furniture and financing as one service. Or if the paper manufacturing industry outsources distribution as standard, consider combining manufacturing and distribution into one offering.
Note – bundling works great as an expansion strategy but not so much as an entry strategy
Improve one aspect of the business
All the advice in this post involves improving just one aspect of an existing business to serve your target customer better. Doing just one thing better is enough for people to choose your business over another.
This could mean making your product/service easier to use, faster, cheaper, offer better customer service or generate better results among a variety of other things.
To identify where an existing business is failing to meet its customer’s demands, look at customer reviews to identify the most frequently talked-about issues. Another way is to explore communities where your target audience hangs out (i.e. Facebook Groups, forums, events) and find out if people are seeking recommendations/alternatives for existing products.
Inspired by this thread by Will Cannon