One of the cool things about being an entrepreneur and business author and speaker is that I get to use all kinds of big words and phrases that make me sound much smarter than I am.
For example, just saying the word “entrepreneur” makes me sound quite educated and continental, despite the fact that the only subject in school I failed miserably was French.
After an entire school year the only thing I learned to say was, “Mon professeur est un porc de verrue,” which loosely translated means, “My teacher is a wart hog.”
You can see why I got “la F.”
One of the hot catchphrases being bounced around a lot in business these days is “competitive advantage.”
All the experts tell you that you must get the competitive advantage over your competition before they get the competitive advantage over you. He who gets the competitive advantage wins the game!
While that may be true, trying to come up with ways to gain the competitive advantage can drive you positively écrous (look it up, Pierre).
Can we beat them on price? Can we beat them on selection? How about the quality of our goods or the strength of our warranties?
Can we one-up them on response time or the number of pepperoni we put on our pizzas or the slices of cheese we slather on our burgers?
Here’s the thing most entrepreneurs don’t seem to realize when it comes to gaining the competitive advantage: you can only gain the competitive advantage in those areas in which you are clearly superior to your opponent.
Read that sentence again and let it soak in for a minute, I’ll wait.
You can’t gain the competitive advantage in an area in which you are clearly inferior to your competition, so why waste time trying? Oh sure, you can come up with handy-dandy slogans like “We’re the low price leader” and “Our meats are the freshest in the land.”
You can throw money at marketing your witty catchphrase until everyone on the planet has it permanently engrained in their brains (can you hear me now?). But the moment the consumer has to pay more for your goods and your meats taste like day old French bread, all the marketing in the world won’t prove a lie to be the truth.
Word of mouth and reality have killed many a great marketing campaign.
So you should only compete in those areas where you have a good chance of actually winning, i.e. gaining the competitive advantage.
It’s all about bragging rights; and if you have very little to brag about your customers will come to see you as just another bag of wind in a breezy marketplace.
Many companies compete on price, especially those in the grocery and retail industries. With profit margins as slim as Britney Spears chance of winning mother of the year, trying to go head to head with the big boys on price is a losing game.
You can’t compete on price with the Wal-Marts and Coscos of the world, so stop trying.
Again, concentrate your efforts only in those areas where you have a better than even chance of gaining the competitive advantage.
How about quality? Is your product superior in quality to all others on the market? If so, concentrate on proving it and branding yourself as the quality leader.
How about customer satisfaction? If your product has documented proof that 98% of customers are happy with their purchase while the industry norm is 75%, make customer satisfaction your competitive advantage mantra.
How about customer service? If your customers love you and keep coming back for more, then concentrate on making that your competitive advantage.
There are other ways to get a leg up on the competition: being first to market with a new product, pioneering a new technology, hiring a key executive to run the show, and yes, coming up with a catchy slogan that everybody knows and you can back up.
Bottomline: if you can’t compete in a specific area, stop trying.
You’re fighting an uphill battle you can’t win. It makes no sense to compete in a contest where you know in your heart you can’t win.
Concentrate on kicking the competition’s derriere in those areas where you have the superiority to do so. Viva la différence!
Permalink
Be sure to see all our latest wholesale arrivals @ http://savesucash.com/
Friday, August 17, 2007
Tuesday, August 7, 2007
How To Tell If Your Amazing New Product Idea Is Really Worth Gambling On
Q: I have a great idea for an amazing new product. There is nothing like it on the market and no competition that I can find. I think it will be a huge success and so does everyone I tell the idea to. I’m willing to bet the farm on this one. What do you think my chances of success are?
A: I’m a lousy poker player, mainly because I can’t help grinning like the village idiot when blessed with a winning hand or frowning like a sad clown when dealt a dud.
I also never make odds on the success of “amazing new products” because more often than not the only thing that’s amazing is the way the product is totally ignored by the buying public. In my software business there have been times when we came up with what we thought was an amazing idea for an amazing piece of software - a piece of software so amazing, in fact, that we knew that all mankind would sit up and take notice, then line up to write us checks.
After hundreds of hours and thousands of dollars spent developing the product we were amazed to find that the only people who thought the software was truly amazing was us.
We made mankind yawn. Quite an amazing accomplishment, if I do say so myself.
It worries me that you say there is nothing like your idea on the market. While you may think that is a good thing, it might actually mean that there is no market for your product. The same holds true for a lack of competition. A total lack of competition might mean that there is no demand for such a product.
Rarely does a product come along that revolutionizes an industry. Rarer still does a product create a new industry on its own. So, how can you tell if your amazing new product really is worth gambling on? The truth is, you can never be 100% certain that your idea will sell. No matter how enamored you are of it or how much your friends rave about it, the success of a new idea depends on a number of factors, many of which are beyond your control.
Such factors include:
The viability of the idea: is this really a product that you could build a company around? Does the idea have the potential to generate revenue or customer loyalty?
The people implementing the idea: the right team can make even a mediocre product a huge success (ever heard of Windows). Inversely, a bad team couldn’t sell ice water in Hades. Pick your team carefully. The right people really do make all the difference.
The demand for such a product in the marketplace: will this product fill a need or satisfy an itch?
The competition: is the market already crowded with competitors? If so, what will it take to move your product ahead of the pack?
The depth of your pockets: even an amazing product requires a ton of cash to go from drawing board to store shelf.
The availability of other resources required to take the product from the drawing board to the consumer: do you have the time, the drive, the perseverance, the knowledge, the contacts, the support, and a hundred other things required to bring your amazing idea to fruition?
The list wouldn’t be complete without sheer luck and timing.
And a thousand other things.
Before you invest too much time and money into your idea, do a little research to determine if it’s an idea that’s really worth gambling on:
Research the market for similar products. Again, if there are no similar products on the market that might mean there is no market for that product. If there truly is nothing exactly like your product, research similar products that fill a similar void in the consumer’s life. Learn all you can about such products: pricing, market share, track record, etc.
Research the competition. As mentioned earlier, if there is no competition there may not be a market for a product like yours. If there is competition, research the competition fully (little guys and big guys) to help determine if you can realistically compete for market share.
Identify your target customer and ask them for an honest evaluation of the idea and its marketability. Avoid friends and family as they usually just tell you what you want to hear. If your target customer is a 35 year old female, pitch your idea to every 35 year old female you meet and gauge their response. Just don’t break any stalking laws in the name of market research…
The best advice I can give you when it comes to amazing new product ideas it’s best to follow your head and not your heart. It’s a lesson that took me years to learn. If I had a nickel for every amazing new product I’ve invested in I’d go play a few hands of poker.
Permalink
Be sure to see all our latest wholesale arrivals @ http://savesucash.com/
A: I’m a lousy poker player, mainly because I can’t help grinning like the village idiot when blessed with a winning hand or frowning like a sad clown when dealt a dud.
I also never make odds on the success of “amazing new products” because more often than not the only thing that’s amazing is the way the product is totally ignored by the buying public. In my software business there have been times when we came up with what we thought was an amazing idea for an amazing piece of software - a piece of software so amazing, in fact, that we knew that all mankind would sit up and take notice, then line up to write us checks.
After hundreds of hours and thousands of dollars spent developing the product we were amazed to find that the only people who thought the software was truly amazing was us.
We made mankind yawn. Quite an amazing accomplishment, if I do say so myself.
It worries me that you say there is nothing like your idea on the market. While you may think that is a good thing, it might actually mean that there is no market for your product. The same holds true for a lack of competition. A total lack of competition might mean that there is no demand for such a product.
Rarely does a product come along that revolutionizes an industry. Rarer still does a product create a new industry on its own. So, how can you tell if your amazing new product really is worth gambling on? The truth is, you can never be 100% certain that your idea will sell. No matter how enamored you are of it or how much your friends rave about it, the success of a new idea depends on a number of factors, many of which are beyond your control.
Such factors include:
The viability of the idea: is this really a product that you could build a company around? Does the idea have the potential to generate revenue or customer loyalty?
The people implementing the idea: the right team can make even a mediocre product a huge success (ever heard of Windows). Inversely, a bad team couldn’t sell ice water in Hades. Pick your team carefully. The right people really do make all the difference.
The demand for such a product in the marketplace: will this product fill a need or satisfy an itch?
The competition: is the market already crowded with competitors? If so, what will it take to move your product ahead of the pack?
The depth of your pockets: even an amazing product requires a ton of cash to go from drawing board to store shelf.
The availability of other resources required to take the product from the drawing board to the consumer: do you have the time, the drive, the perseverance, the knowledge, the contacts, the support, and a hundred other things required to bring your amazing idea to fruition?
The list wouldn’t be complete without sheer luck and timing.
And a thousand other things.
Before you invest too much time and money into your idea, do a little research to determine if it’s an idea that’s really worth gambling on:
Research the market for similar products. Again, if there are no similar products on the market that might mean there is no market for that product. If there truly is nothing exactly like your product, research similar products that fill a similar void in the consumer’s life. Learn all you can about such products: pricing, market share, track record, etc.
Research the competition. As mentioned earlier, if there is no competition there may not be a market for a product like yours. If there is competition, research the competition fully (little guys and big guys) to help determine if you can realistically compete for market share.
Identify your target customer and ask them for an honest evaluation of the idea and its marketability. Avoid friends and family as they usually just tell you what you want to hear. If your target customer is a 35 year old female, pitch your idea to every 35 year old female you meet and gauge their response. Just don’t break any stalking laws in the name of market research…
The best advice I can give you when it comes to amazing new product ideas it’s best to follow your head and not your heart. It’s a lesson that took me years to learn. If I had a nickel for every amazing new product I’ve invested in I’d go play a few hands of poker.
Permalink
Be sure to see all our latest wholesale arrivals @ http://savesucash.com/
Subscribe to:
Posts (Atom)
