Why Competitive Lying Can Be Your Biggest Startup Mistake
As a startup owner you always want your business to stand out in crowd. You are sometimes obsessed with the idea of it being different or you just want to show how unique you are. But the question is, is your business really that unique?
When entrepreneurs try to find their customers they often narrow down on the filters they create. It is just like selling chocolate chip donuts in a market with lots of donut shops.
You might feel you have a specific niche with chocolate chip donuts but then you'd really be ignoring the fact that a lot of donut shops already exist in your area. Such temptation to show competitive advantage by placing your business in a non-existing niche can be fatal for a business.
Now the question is how do you know whether you are actually placing your business in the market niche or it is just a niche created out of filtering? First thing to identify here is how much is the demand for products that you are selling. Is there a real market gap or it is just a specialty or is it something you are going to do differently with your business. Is it just the love for your new business idea that makes you come up with this market segment which really does not exist at all?
These questions are really important to be asked by every entrepreneur before placing your startup for any segment. Every successful startup is successful by creating a monopoly in market.
Creating monopoly is either by being exclusive or by monopolizing everything in your segment. Just like Walmart monopolized everything about the retail supermarket and became the largest player.
They started by being exclusive in an area, then pushing manufacturers to reduce cost looking at Walmart's purchase size thereby lowering selling prices. They started becoming exclusive by being most cost effective.
On the other hand was Apple, which monopolized the smartphone market at a time when there was no smartphone in real sense. Apple launched a smartphone that was really wonderful to use. Both Walmart and Apple have separate business market but there is one thing in common and that is monopolizing the market segment by identifying a real market need.
So it becomes really important to understand a real market need. You might have started a business in a area which is entirely new but there may be no market need for it now. It may become a need ten years from now but not now.
With the market need it is also very important to understand whether your business can create monopoly in the market. Every successful business has this in common- monopoly (in one way or the other).