As an entrepreneur there are no guarantees. Actually 90% of entrepreneurs give up within the first five years.
In this post I will present you with the secret strategy of creating a successful business!
Your Will Experience Pain and Suffering
Now Martin Luther King said the following:
“Every step toward the goal of justice requires sacrifice, suffering, and struggle; the tireless exertions and passionate concern of dedicated individuals.”
– Martin Luther King, Jr
Now while I won’t compare his battle for freedom for entire groups of people to something as petty as building a business, his words are still a huge inspiration if you are trying to do so.
The reason why I bring this up, is because while I will give you a strategy you can use to build a successful business, you will still be challenged by “suffering and struggle”, you will be required to take massive action (“tireless exertions”), and put your passion and drive into it (“passionate concern”).
So this is not a push button strategy for success. You still need to take action and get stuff done!
So let’s move right to the strategy and I will go into more details about each step afterwards.
The first step of the strategy involves in you choosing an existing market.
Yes, I do not want you to invent something unique. Forget about the Blue Ocean Strategy. Creating a business without any competition just means that you need to change people’s behavior (in order to persuade them that they need your product), and that is NOT an easy thing to do unless you have like millions in the bank for a Super Bowl commercial.
So you want to go into a market where people are already spending money, customers that have already felt a pain and are now looking for and willing to pay for solutions.
Successful entrepreneurs are doing this all the time. Think Apple creates some amazing products (I do ;))? The technology in all their products is available to their competitors as well – heck they couldn’t even make the iPhone and iPad without Samsung, one of their biggest competitors.
Once you’ve selected a market to go into, you need to identify the players and their underlying business model.
While the model itself is free, I would recommend that you purchased the book as it’s really inspiring and has an awesome layout (so in this case don’t get the Kindle version!).
The questions you really need to ask yourself is:
- How are they getting their leads?
- How are they converting their leads into customers?
- How do they deliver the product or service?
- How do they get paid?
“But Rasmus isn’t this just copying” – YEP it sure is.
But we’ll add a small twist to it as we move to the last part of the puzzle…
Now that you know how other successful products or services are sold in the market you wish to penetrate, it’s time for you to be unique.
Now you do not need to be unique in your entire business or product, but you do need to thing about your Unique Selling Proposition (USP).
Now there are mainly two different ways that you can do this:
- Bring the model to a new market
- Improve one or more of the existing ways of doing it
Let’s look at these to ways in a little more detail.
When Danish IT entrepreneur Martin Thorborg started the company SpamFighter which sold software to combat spam in your email inbox, he (according to himself) already had more than 300 competitors, one of them being Microsoft.
You might ask why you would ever go into such a crowded market, however it was an established market where people were already paying for products.
So they modeled the competitors and then did something brilliant.
The existing products in the market were typically targeting the IT savvy. The nerds so to speak. SpamFighter chose to create a user interface that targeted the average computer illiterate. Think of your grandmother. In this they brought the same technology that everyone else was also selling to a new market.
But they didn’t stop there. They also translated the product into more than 25 languages! The other products were typically only available in English or a couple of the bigger languages.
So they took existing technology and brought it to new markets that also needed help fighting spam in their inbox.
Improve one or more ways of the business
The first thing a lot of people think about is “I can sell this product or service cheaper”.
However competing on price was never a good strategy to getting a sustainable business.
First and foremost it would attract people only concerned with price (who would abandon you the second someone gave them a better offer), but it would also start a negative spiral as you continually had to go lower than your competition.
So if price should not be a part of your USP, what should?!
To give you a little inspiration, here are five ways to improve your business over the competition.
- Create a better looking website than the competition. In a lot of industries websites still look like it was created in the 90’s. People can’t see if you’re a one man operation or a 1000 people corporation form the website. They can only see how professional it looks and how easy it is to find the information that they’re after
- Give the industries best customer support. The bigger the company the more distanced it tends to be from it’s customers. By showing your customers that you care you will get more passionate customers who will in the end also recommend you to their network.
- Find a better product. You might have found a product that is even better than the one currently selling in the market. Perhaps it got more features, perhaps it’s better for the environment or perhaps it simply just looks cooler
- Optimize product or service delivery. Could you speed up the delivery of the product or service? Perhaps the current market leader can deliver in 5 days, can you do it in 2?
- Make it easier to buy. A lot of companies still make the actual purchase process much harder than it has to be. You might get their 5 step for ordering down to a single page where you ask for their name, address and payment information (one of my companies do e-commerce websites so I know it’s possible :)).
Rip, Pivot and Jam
To end this off I wanted to show you a similar approach used by the cool cats Dan and Ian from the Tropical MBA podcast.
They describe their very successful model as Rip, Pivot and Jam.
- Rip – Identify if others in the niche are making money from it
- Pivot – Bring it to a new market / new approach
- Jam – Crash the boards with 100% energy
If you want to know more about this strategy you should definitely take a listen to this episode of their amazing podcast.
Got any questions or comments? Don’t hesitate with letting your voice be heard in the comments below!