Unique ideas are what drive successful entrepreneurs, but now there are an increasing number of startups competing for the attention of venture capitalists than earlier this century. It’s getting more difficult for both discovering original ideas and standing out in a crowded market, but it’s still possible to be a profitable game-changer if you focus on the following principles.
1. Learn From Leaders
Before plotting your course toward success, take some time to study pioneers that have already paved the way for you with winning business models. Peter Thiel and three partners, for example, introduced a new way to transfer money online with PayPal in 1999 through their firm Confinity, which merged with Elon Musk’s company, X.com, the following year.
The ease of making online transactions using email addresses through this ecommerce solution was a new experience in this era and gained quick acceptance by eBay users. PayPal subsequently was acquired in 2002 by eBay, which spun off the company in 2015 to become its own multi-billion dollar venture. Other exciting startup stories to study that grew from small operations to colossal empires based on new experiences include Google, Facebook, Uber, Airbnd, OneFineStay, plus more…
2. Start Out Small
Companies usually don’t become big without first proving themselves on a small scale. So begin focusing on your own local market. That will give you a chance to test your product or service and work out all the bugs. Learn how your target market responds and if they don’t respond, reimagine it using the feedback they give you. Sometimes it takes several versions of a product before all cylinders are running smoothly.
Growing from local roots is a traditional way to build a business because it presents low risk. It’s how many startups get off the ground and then get noticed by venture capitalists, who like to see evidence of commercial potential before making a huge investment. It’s much easier to create a product-market fit on a small scale before testing it on a national or global level.
3. Connect With Your Community
It’s important, however, not to just clone a national business like Amazon, which can potentially force you out of business if you don’t develop a local network. Sometimes you can block such a scenario by embedding familiar flavors in your product that resonate on a local level. This strategy makes it difficult for big players to spend time and money to tap into personalized experiences. Make sure you have enough supporters in your community to justify local marketing.
4. Focus On Vertical Channels
If you concentrate on a generic product, you have a chance of reaching a wider market than if you sell a more niche-oriented product. But generic products also tend to get lost in the shuffle since they invite broader competition. The advantage of niches is they can potentially provide more personalized and specialized experiences. Vertical markets involve selling to narrow targets, usually within specific industries.
When you find a market hole in your research, vertical marketing becomes extremely viable. This concept is particularly true when you have the opportunity to optimize experiences that cannot be found elsewhere in the market. If your product or service has a ticket-value with customers that justifies an investment in marketing and it can be sold over and over to the same people, then it offers endless opportunities.
5. Deliver Quality
Quality is a major key to gaining market attention, especially if it exceeds expectations and is superior to that of competitors. It becomes much harder, though, to control quality the more your company grows. The more you have to invest in quality to maintain a competitive edge, the more risk you add to the equation. That’s why it’s possible for smaller players to concentrate on quality solutions on a small scale, especially for services that depend on expertise.
One opportunity for competing on quality is to provide a curated supply. This strategy applies to building a gateway to a specialized marketplace that emphasizes high-powered talent, such as programmers and engineers. An elite-driven marketplace can beat one that allows low barrier to entry for almost anyone, such as game reviewers. Another opportunity for delivering quality is to provide a managed service, such as a computer network help desk.
6. Create Market Disruption
The boldest way to capitalize on a startup is to offer a disruptive experience that shakes up a traditional market. Sometimes large players can become complacent about their market positions and lose touch with their customers as this trap is easy to fall into if there hasn’t been direct competition in a long time. The challenge to toppling a giant is to design a paradigm-shifting product that is:
- More effective
Planning a winning strategy for a startup requires seeing beyond the curve. But in order to reach that destination you must take steps to evolve in both a practical and creative manner. Testing your idea and absorbing market feedback are the primary keys to shaping a refined product that breaks down barriers and advances to the next level of attracting big investors.Business & Finance Articles on Business 2 Community