Business Startup

Outwit the competition and play your own game

Outwit the Competition and Play Your Own Game

Whether you are a freelancer, businessman or entrepreneur, you will find yourself looking for ways to distinguish yourself from your competition. You can call it branding, marketing or just doing business. All these terms are saying the message. You want to stand out, to step out from the crowd. You want to be different. What’s more, being able to differentiate your business will play a huge role in pricing as well and so help your business not only survive, but to thrive.

Competition is a loser’s game

Let’s start with my favorite part of the competition subject. It is a loser’s game. I wrote it before and will repeat it here as well … If you want to enter market segment where is already established competition, you are putting yourself into weaker position. Meaning, not only you have to come up with some strategy to attract enough customers to make your business viable, you also need to find ways to fight with the competition. This is similar to trying to catch two rabbits in the same time.

Do you know how this situation generally ends? You will catch neither of them. To translate it to your business … You will take some part of the resources you have available and use it for marketing purposes. This will lead you to dead-end street. Why? First, your business will start bleeding money before even making any. This danger can be lowered significantly following some of the principles of lean startup methodology, mainly the ones about building an MVP. I’m not saying it is a golden bullet, but it can help.

Second danger of this “two rabbits” strategy is that since your competition is more established than you are, they will probably have more resources in their disposal than you. Meaning, they will be able to respond faster and with more power than you might think. If this happens, you have two options. First, going into the defense mode. Second, taking the risk and respond with attack. The problem is, both of these choices can result in infinite loop and your business to go down faster than shares of Lehman Brothers.

Guerilla answer to competition

Fortunately, there can be some way around this. Have you ever heard about guerilla warfare? According to Wikipedia, guerrilla warfare is “a form of irregular warfare in which a small group of combatants such as armed civilians or irregulars use military tactics including ambushes, sabotage, raids, petty warfare, hit-and-run tactics, and mobility to fight a larger and less-mobile traditional military.” In other words, something like David and Goliath–smaller against the bigger.

Anyway, why am I giving you a lecture from war strategy? The reason is that very similar approach exist in marketing. It is called a guerilla marketing and it is a strategy designed for smaller businesses to help them promote their products. Unlike the traditional marketing, guerilla marketing focus on unconventional ways to market your product using small budget. The main premise is that you don’t need to have a big campaign with ads on billboards, radio or in TV. Guerilla marketing attacks the competition by being more personal.

The number one thing about guerilla marketing is that it reaches customers directly. Where traditional marketing use spots TV and radio or podcasts, guerilla marketing puts your message on the move–people will see it on the way to work or while shopping. Some of the examples can be a graffiti on the street, posters on the buildings indoors, distributing flyers, contests and so on. If you heard about the “Do Things that Don’t Scale” by Paul Graham, guerilla marketing will be familiar to you and easy to use against your competition.

Question of the value

Will guerilla marking guarantee you getting more customers and staying ahead of competition? Well, no. No matter what tips, tricks and strategies will you use or how high your marketing budget is, if your product or service sucks customers will not open their wallets anyway. This brings us to the most important piece of the puzzle … The value your product or service offers to the customer. If you went through MVP phase, you know there is a problem to solve and people are willing to pay for it. However, this is not everything.

For those of you who skipped the customer development phase, you should do it right now. Until you have validated that you have something not just to be sold, but something people will want to buy, you are going blind. The next step is to decide on the MIF–most important feature. Again, it is feature not features. It does not matter what kind of product or service are you building or going to build, you have to narrow your focus on one thing (great book on this subject), one thing only and hone every detail.

If you hear that voice of resistance in your head right now, it’s OK. I’ve been there too. This urge to build a Swiss knife for everyone is a common thing. However, you cannot afford going too wide, not right now. For this moment, you have to stay as lean and agile as possible which also means getting rid of everything that’s not essential. So, if your product has more than one feature, take the data you gathered in the customer development stage, find out what is the most often mentioned and used function and cut off the rest.

To deliver you at least one good news, when removing non-essential features, you don’t have to abandon them forever. You can either put those features aside for now and come back to them later if you will still want to include them or you can turn them into independent products. Think about it. Instead of having one product being average in three things you can be patient and with time develop three products or services all with one special feature perfected in every detail. What do you think will provide a bigger value to your customers?

Niche, competition and customers

The last thing you should think about is whether you should niche down–choose a small market segment and build your customer base there or not. The upside is, from the competition point of view, it will lower the number of competitors and so increase your chance to survive. On the other hand, the downside is that smaller market segment also means smaller number of potential customers. Whether it means smaller profits is questionable and depends on your pricing strategy.

Apple, for example, focus on smaller market segment and owns smaller market share (in some categories) than other electronic manufactures. However, its profits are much higher thanks to its pricing strategy based on strong brand. If you can apply the same approach–build a strong brand and charge high prices–choosing a small niche will not be an issue. Otherwise, your business might have problems to stay ahead of competition and reaching the break-even point–being profitable.

In most situations and for majority of entrepreneurs or freelancers, my advice is to start with small market segment. When you start with smaller more defined segment it will be also easier for you to target specific customer without dispensing too much of your resources. Another reason is that smaller segment comprise of smaller customer base, hence it is easier to dominate in less time. The main reason is still smaller number of competing businesses or, in the best case scenario, no competition at all. Meaning, you can use your resources and focus on customer acquisition.

Closing thoughts on outwitting the competition

Whatever you choose to gain a leverage over competition on the market, you need to remember that your differentiation strategy will have to go through the toughest test imaginable–meeting the actual customers. If people will not be interested in buying your product, your business will not survive, no matter whether you have competition or not. So, don’t forget to always give people reasons to love to use your products–provide the value!

If you liked this article, then please consider subscribing.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.