“It’s a $100 million dollar industry, all I have to do is capture 1 percent of that market and I’ll make a million dollars.”
After working with hundreds of startups, I have heard this statement countless times. This way of thinking is held by many business owners regardless of their industry, background or target market.
While on the surface this thinking seems logical, it is fundamentally flawed.
These same business owners argue that their companies can succeed on customer service, competitive pricing and high quality results. These “advantages” are neither sustainable nor differentiating, making growth virtually impossible. Business owners that try to compete in this way create — at best — what I call a “job business” — that is, a business that is just a glorified job.
What makes trying to capture market share in an existing market so challenging is that you are behind everyone else from day one. Those that already own market share are advertising, creating strategic partnerships, innovating and doing whatever they can to make sure you can’t come in and steal that $1 million out of their market.
To be truly successful, you must create your own market. Create objective differentiation and you can establish your own marketplace and own all of it rather than get your ass kicked in someone else’s.
Want to find out if you are in your own market or competing in somebody else’s?
Here is a quick test:
- Write down your elevator pitch. It should only be one or two sentences — if it’s not, condense it (something you should work on anyway). Pro Tip: Your elevator pitch should never contain subjective words like “better.”
- Circle the words that describe what you do or how you do it.
- Now, look at each circled word and ask yourself “do my competitors do or say this too?” If your answer is yes, cross it out.
Do you have anything left circled? Most people won’t but if you do, that is your unique market position and should be the basis for how you define your new marketplace.