You have an idea for a business but there’s already a lot of competition. Does that mean you need to find a new idea?
Umm, no. The fact that there is a lot of competition in the industry you’re about to enter is actually a good sign.
I do some angel investing, and I get a little nervous when people say there is no competition for the idea they are proposing. The market has a funny way of sorting out the good ideas from the bad, and, if there is no competition for your idea, chances are, there is no market, either.
Companies succeeding in doing what you’re proposing is a good sign – the market has validated the core of your idea.
Instead of reinventing the wheel, all you need to do is take a concept that is working and find a small corner of the market to dominate.
My entrepreneurial friend Verne Harnish – founder of the Young Entrepreneurs’ Organization (now known as the Entrepreneurs’ Organization) and the Association of Collegiate Entrepreneurs, founder and chief executive officer of Gazelles Inc., and the author of Mastering the Rockefeller Habits – defines strategy as simply finding something that meets two criteria: First, that customers care about it and, second, that it makes you unique.
Is there something that a segment of the market cares about that you can stake a claim to?
Someone had already staked a claim to the big things customers cared about when buying a laptop. Still, there was a small segment of customers who wanted a laptop to be rugged above all else. Police forces want their officers to have laptops that could stand up to the rigours of the inside of a squad car. Travelling salespeople needed their laptops to withstand the punishment of airport security.
So Panasonic found a small but profitable niche in developing ToughBook – the most durable laptop on the market.
Think about the competitive market you want to enter and, like Panasonic, find an angle.
Richard Branson entered the hyper-competitive airline business by launching Virgin Atlantic Airways when he discovered there was a group of customers who wanted good but unpretentious service, yet weren’t getting it from stuffy British Airways.
Mr. Branson didn’t shy away from the market because of the competition, but he did find an angle customers cared about that could make Virgin stand out in a crowded market.
You can, too.
Special to The Globe and Mail
John Warrillow is a writer, speaker and angel investor in a number of start-up companies. He is the author of Built To Sell: Creating a Business That Can Thrive Without You, published by Portfolio Penguin.