How to Outwit Your Competition You don't have to reinvent the wheel to come up with a great business idea. Here are three ways to look at what your competition is doing -- and do it better.
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Decades of experience have taught me that making thoughtful improvements to existing products is a consistently profitable way to innovate. An effective way to come up with ideas is to start by surveying the market in a familiar industry and asking: What's missing?
Maybe a potential demographic has been completely overlooked by industry leaders. Maybe there's been a lack of innovation for years. You don't have to reinvent the wheel to create a winning innovation.
The question to ask is: How can the products already out on the market be made better? Here are three ways to help you out-design your competition:
1. Examine the dominant brands.
Years ago, I wondered why the shape of the guitar pick had remained unchanged for decades. There were so few designs, even colors, to choose from. I began examining the market and it became clear to me the dominant brands were selling picks that only appealed to serious rock musicians. Where were the picks for garage bands? Where were the picks for fans? As a result, I started a business that sold novelty picks with designs ranging from Mickey Mouse to vampires to a line with polka dots and leopard print marketed to adolescent girls. We also targeted different stores from our competitors, including 7-Eleven and WalMart -- not the typical retail environment for guitar picks, which were primarily being sold at specialty music shops.
Choose a specific market that intrigues you. Determine what the benefit of each competing product is and get a sense of each producer by visiting their website. Who are they marketing their products to? What message is their brand trying to convey? What promises do they make to their customers? Are there any obvious holes? Has a potential demographic been ignored? Knowing what is already out there helps identify what isn't. Use your creativity to envision alternative, superior solutions to the problem their products attempt to solve.
2. Take a good look at packaging.
Don't underestimate the power of delivery. Packaging is an incredibly important extension of your brand, as it forms a consumer's initial impression.
Take my guitar pick business. At the time, packaging had not been made to entice customers. Most stores sold picks in tackle-boxes that you had to rummage through to find what you wanted. Picks were viewed as tools, not as accessories or collectable items. The competitors had successfully been selling picks this way for thirty years. I decided it would be best to package our picks individually and create counter displays to show off the designs -- a markedly different approach from the competition.
3. What aren't customers getting?
It sounds so obvious, but many entrepreneurs don't take the initiative to find out what consumers want and like. Visit retail stores in person to observe how people interact with the products. What are consumers saying about the products they buy and use? Read product reviews on Amazon and message boards to learn what's working and what isn't.
My interactions with consumers confirmed that there was an untapped market for unique, fun picks. We created a survey and asked store managers to have customers fill it out. We explicitly asked them to tell us which designs they liked best and would buy. We used what they told us to create designs that sold. There was no mystery.
Innovations can come from anywhere. But when you choose to capitalize on existing demand by out-designing the competition, you up your chances of success.