Dear Startup Doctor,
After attending one entrepreneurship seminar, I decided to build a business around my writing talent. So, I started a content creation agency. However, I see many established people doing similar business with a bigger advertising budget. In earnest, the competition is intimidating, and I don’t know if I have a chance or I should just find something else to do. Please, I need your advice. Thank you.
Joseph, D. Kano State
To get started, I want you to know that so long as you are in business, one sure thing is that you will face competition. Some of your competitors might be established companies, while others might be startups. Some of your competition might also be people you have trained or who have worked for you and know your business secrets.
Even if you are the first to pioneer an industry, the fact is that you will not remain the only person for long. Many people will get into the business after you and will even try to deliver better solutions than what you offer. Have you not noticed that after people launch an innovative business that succeeds, many other people start running into it? That’s how life is, and you really cannot change it.
However, what you can do is to control the five forces. The five competitive forces, according to Porter, are the elements that shape competition within different industries. These are, a) threat of new market players. B) The threat of substitute products. C) Power of the customers. D) Power of suppliers. E) Industry rivalry. All these control the competitive strength and appeal of a market.
So, what is your survival strategy? How can you, as a startup, play with the giants and yet stay ahead of the curve? As much as you see these new entrants as a threat to your business wellbeing, they, in turn, see you too as a threat. These new entrants or established businesses will do everything possible to gain a hefty chunk of the market share to dominate you and any other competitor.
It is crucial that you understand these five forces and how they shape competition. Understanding Porters Five Forces will help you build an iron-clad strategy. It is also essential to understand that not all competition is bad for business. The presence of your competitors can work in your favour if you know what to do. They will keep you on your toes and shake off complacency from you. The competition will force you to continually review your business goals and objective to see how you can best serve your clients while continuing to maintain a balanced and profitable book. In essence, having competition is not bad; if you are smart, a competitive business environment will simply drive you as an entrepreneur to always innovate and listen to the pulse of the market.
Fight or Die
The reality of the business environment is that you either fight for your survival or your organization dies. Your competition is not in business to help you succeed; they are in business to make money just like you—often from the same target market.
The market is daily bombarded with offers and adverts that leave the airwaves saturated, and the target audience exhausted from promotion overdose. It is hard to choose one soap or cereal box from the other or one service provider from the other. Especially when everybody is pretty much offering to do almost the same thing.
The competition will undercut prices, lobby government for tax reprieves, offer more for less price etcetera. If your competition is an old player, you will have a serious challenge on your hand as they could deeply steep your business into a price war, which you cannot afford as a startup! They will do everything within their power to gain and retain market share. So be ready to fight this war, however, just make sure you don’t fight dirty. Always maintain your business integrity.
Don’t Fight Dirty
While you should fight to survive and thrive amid competition, please don’t fight dirty. It always backfires. Don’t compromise the integrity of your business by deliberately sabotaging your competitor. Don’t spread lies about them or even wish the evil in your heart. For me, I recommend that your attitude should be the one that says, “The sky is big enough for us all!”
Once you have tuned your mind into toeing this line of thought, you won’t regard your competitor as an enemy. You will just mind your business and focus on consistently hitting your financial targeted. You will be so target focused that you will not have time to stalk your competition and lose sight of your business vision and goals.
No matter how big their advertising spend is, just focus on delighting your customer at each touchpoint. Since you are just starting and don’t have a large marketing budget, explore cost-effective marketing strategies that can lead to a flood of customers. When you don’t have an inexhaustible budget for marketing, you need an innovative strategic plan. So, think! Look for ways to serve your customer better than they are being served by the best in your industry.
If there is any information they want from you that won’t mean giving away your trade secret, don’t hide it from them if you do a better job of marketing and customer relations that gets their consumers attracted to you, tough luck! It is not your fault. They are simply causalities of market reality. Please don’t feel guilty about this.
Make Better Offers
As big and intimidating as your competition is, you need to become fearless and boldly roar your presence in the market place. What your customers are looking for is not their big name; they are looking for a brand that will provide them with the solution that meets their need and makes them feel good in the process. So, don’t get fixated on the Goliath in your industry. Keeping your eye on what they are doing is okay. However, focus all your resources on your customers and on how to deliver superior products, services plus bonus to them.
Market Your Business Better
Moreover, instead of worrying yourself about competition, worry about how best to brand and position your business better. I have seen where more skilled people charge less than those who are not as good as they are. While many factors may be responsible for this, one that is common in such a situation is that the less skilled did a better job of marketing their services or products. He who markets best wins! You might ask, “Is this a sustainable strategy?” I don’t think so. This strategy is not sustainable because you are dealing with people who are experiencing your brand through your products and services. If the marketing got them to purchase the first time, you best make sure that the product fulfils the brand promise, else, they will switch to another brand and tell everyone around them not to patronize you.
I’m a strong advocate of being good at what you do before stepping out. You’ve only got one shot! If you doubt me, research the Satzenbrau case study. Why did this product from a none brand not make it in the market despite the number of times relaunched and the considerable budget dedicated its rebranding?
You see, while they may have lots of money to spend on advertising and marketing, which you don’t have, settle down and ensure the quality of your product meets the target markets appetite and is beyond doubt. Devise better offers that can win more attention and get you higher sales.
Instead of just being a writing agency, you can add graphic design, transcription and editing solution to the services you offer and charge a higher fee. You can even look for a bonus to give your customers that cost very little to develop and offer it as a package. It must not be ‘buy-one-get-one-free’ style of the bonus; you can provide free consulting or information as a bonus to your customers. That little extra may be all you need to keep them coming and win more clients.
Again, you mentioned that you started a writing agency based on your writing talent. I want you to go beyond this ability. Acquire additional skills. Check other complementary skills you need to excel as a writer such as Search Engine Optimization and Social Media Management etcetera. It is better to sell when you are delivering a complete package than selling a single service.
Don’t Be Scared of the Goliaths
As you do business, I want you to bear something in mind: so long as you are in business, you will always have competition, and there is no end to it. When you see the competition, don’t be intimidated, they are companies run by human beings like you. If you have to pray for divine revelation, pray. If you have to think, then, by all means, call a strategy session. If you have to book a consultation session with the Startup Doctor, please do so. Until you find out how to survive and thrive despite the competition, you must never stop innovating, even after you have gained market share.
Every business has its place; First Bank hasn’t died because of GT Bank’s innovation. To survive, they innovated and adapted to the changing times and competition. That is what you should also do with your business.
So Champions, go now and face your competition! In today’s world, David still kills Goliath.
The Startup Doctor.