There is no shortage of entrepreneurs in our world. According to Grace Reader, referring to the Kauffman startup index, about 550,000 ambitious people of different ages open their own business every month. And all these entrepreneurs, no doubt, are fighting for the chance to be the best in what they do, and in the market where they do it - from making the best pastries in the city to creating social networks, to become a full competitor for Facebook or Instagram.
Business success
Unfortunately, according to the Office for the Advancement of the Interests of Small Businesses, 20 percent of enterprises fail during their first year of operation, and only 50 percent “live out” before their fifth birthday. And this once again confirms what we already know: most market segments are filled with competitors to failure. And in such conditions it is quite difficult to develop your business and increase revenues.
Three strategies
However, be aware that you can still outsmart competitors in your industry, no matter how full the market is with the relevant offers. Decisive and experienced startups often find their place in crowded markets, because they somehow manage to do it. Think, for example, about Uber, Zapier or AirBnB, which appeared in the world not so long ago. Of course, all this takes time, patience and strength, but to achieve the desired result, of course, you can. You just have to know how to do this.
1. Return power to your customers
Large companies have a huge budget, hundreds or thousands of employees, and high throughput, which makes most operations look insignificant. Of course, they also have thousands or millions of customers who trust them. In short: they are big, powerful and fearless.
However, sometimes the size of a business creates an environment in which customers or users lose control of its product. Given the power of big data and top-level decision makers, customers may begin to feel they are haunted. Perhaps this is why 42 percent of consumers say they don't trust big brands, according to studies by Ipsos Connect and Trinity Mirror Solutions.
In this regard, 36 percent of smartphone users said they agree with the statement: “I know that by agreeing to the terms, I give them permission to use my personal data, but I don’t feel that I have another choice.” This was the most common response in a study conducted by Mobile Ecosystem Forum.
For example, Uber and AirBnB
Such consumer frustration is also the likely reason why companies such as Uber and AirBnB have been able to succeed and defeat competitors in such popular segments as taxis and hospitality, transferring power to consumers. They provided their customers with more options and created a free market overview system with drivers, hosts and users, which helps to improve the quality of service. In reports, Uber indicates that it has 91 million customers and three million drivers. And AirBnB reports about 500 million arriving guests to date.
2. Focus on an underserved market
Every business has a target market. And over time, this market is adapting, user requirements are changing, and only some large industry competitors manage to adapt to these changes and, accordingly, remain afloat.
Remember Blockbuster CEO Jim Case and his famous last words at Motley Fool in 2008: "Neither RedBox nor Netflix are even on my radar in terms of competition." Its market has changed, and the big old Blockbuster, which did not want to adapt, “died”, allowing companies such as Hulu, RedBox and Netflix to take their place.
On the example of Monkey
Also consider the current social environment. Monkey, a new social media application that grew by more than 1200% in 2017, believes other social media platforms have failed to adapt to the needs of a growing market. In particular, the so-called generation Z. Millennials grew up with Facebook and Instagram and still regularly use these platforms, but today only nine percent of teenagers call Facebook their most preferred social network. Monkey seeks to attract the same young underserved market by incorporating the millennial fashion and pop culture into its application.
As Allen Law, head of development at Monkey, explained: “Generation Z has grown with a front camera and is proud of its favorite street wear brands such as Off-White and Supreme. You cannot be cool for both parents and their teenage children at the same time. You need to create an ecosystem in which adolescents feel exclusive compared to the older generation. And fashion is one of the best ways to communicate with them. ”
Works? Yes, it seems. According to Sensor Tower, Monkey currently ranks eighth in the US social media ranking for iOS. According to the data, 85 percent of users are young people under the age of 22 years. Your business can do the same: find such a large market where competitors neglect service and provide the best for their customers. You can be on top and achieve tremendous success.
3. Turn over the typical business model of your market
When an industry becomes large and established, usually a single recurring business model arises. Take, for example, the social media industry. Almost all existing platforms allow you to create an account for free, but users must donate their personal data to advertisers. In the end, the real “client” of Facebook is the advertiser, and the user is the product.
Consumers don't like this business model: According to the Pew Research Center, 91 percent of Americans surveyed fully agree that consumers have lost control over how their personal data is collected and used by social networking companies, and shocking 80 percent expressed concern about what they consider frivolous the use of their personal information.
This negative feedback from consumers opens up a gap in the growth of new startups and services: YouTube RED now allows viewers to pay for a subscription and exclude all ads from the videos they watch. For example, DuckDuckGo is a search engine that is growing in popularity, apparently because it does not benefit from search engine data like Google, Bing and Yahoo !.
Vid example
In his interview, Jag Singh, the founder of Vid, a social media application that allows users to monetize their own content (as advertisers usually do) and even choose which content the application can and cannot see, has expanded its understanding of this concept. “When you are part of an industry that uses consumers to make a profit, and not to serve those same consumers, I think it's easy for entrepreneurs to use this industry,” says Singh. “All you have to do is turn the business model over and make the customer again a customer, not a product. And consumers really crave it. ”
Conclusion
So, let's assume again that you are trying to develop a thriving business in a vibrant market. Using the three lessons described above, you can easily do this.Remember: you need to return power to the client’s hands, aim at an underserved market and turn the popular business model upside down. Thus, you yourself can become one of the established industry competitors.