Finding Room in a Crowded Market

Do It Differently

But going head-to-head with the big boys at the outset isn't the best way to approach your market. As much as we hate to say it, your business probably won't blow Procter & Gamble out of the water-at least not right out of the gate.

The good news, though, is that you don't have to. "Don't compete," advises Weinzimmer. "Go after periphery networks." Sure, you're still technically in the same market, but your customers will come to you because they're looking for something different.

The e-card business, for example, is dominated by names like American Greetings and Blue Mountain Arts. Who would notice a small
e-card start-up out of Seattle? More people than you'd think: With a user base doubling every month, targets customers seeking grown-up messages free of the saccharine verses found on many e-card sites. Founder Richard Duval takes a fresh approach with his selections, thanks to superb natural photography coupled with original jazz. "I wanted to [offer] something a little more sophisticated," he says. "I hate the cute."

Duval knows he shares the World Wide Web with a few Goliaths, but he also knows he offers a fun and different product. In doing research, Duval found that-of the 800 other e-card sites he visited-no one else offered original art with original, studio-quality music.

Proud of his unique offering, Duval, 46, markets Phototunes as a sophisticated e-card Web site. "I never once thought to myself, 'OK, I've got a great idea and in three months, BlueMountain's out of business,' " he says. "That would've just been foolish." What he is doing is using his free e-cards to entice people to buy his art prints, smooth jazz CDs and deluxe multimedia e-cards. Although his company-like many e-businesses-has yet to reach profitability, Duval is planning to add corporate clients to his roster by providing them with Phototunes products to manage customer relationships.

Thinking about venturing into a market that's already buzzing with competitors? Wes Tyler, a managing member of Old Oak Partners, a small-business consulting and investment firm in Easton, Connecticut, advises entrepreneurs to first ask themselves these questions:

1. What general customer needs are not being met?

2. Is there something customers would pay more for?

3. Is the market really worth entering, or is it a fad like frozen yogurt or cigars?

4. Can you afford the cost of staying put in a saturated market long enough to be the last business standing?

5. Can you capitalize on the competition's mistakes, such as poor location or weak execution?

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This article was originally published in the October 2001 print edition of Entrepreneur with the headline: Push and Shove.

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