Hyper-Competition & Niche Opportunities
Here’s the rub. There is no way to sidestep the reality that the technologically enabled globalised business landscape is hyper-competitive. If you sell hats then there are a hundred thousand hat makers doing it better than you or cheaper than you or faster than you. The same goes for web design, photography… whatever.
Hyper-Competition is the Norm
The first thing to accept in a hyper-competitive market is that you can’t ignore the competition – if you don’t want to compete with the Bulgarian web designer then at least accept he’s already competing with you. He wants your customers. Or she, it doesn’t matter.
The second thing to accept in that environment is that hyper-competition is the new state of play everywhere. Everywhere. You no longer operate in a local area, even if your clients come from a local pool… their options are the rest of the world, if they so choose.
Hyper-Competition leads to Three Options
Option A is to crawl up into a ball, don’t compete and die an unnatural death as a business. Sorry but that’s not advisable – but it’s your choice.
Option B is to create a product in a part of the hyper-competitive market where everybody else is grubbing for their rent. The beauty of that is (a) you know that the product has an existing market and (b) you know that people are cashed up and paying. The down side, of course, is that everybody’s slice of the pie is reducing as more competitors flock like seagulls to the guy with the big bag of hot chips.
Option B also means that businesses are innovating in that space like crazy to out-do each other and so if you get to the top of the pack then don’t expect that good looks alone will keep you there. Innovation takes time, effort and money. Option B also probably means ordinary returns on investment over the long-term.
Then you have option C – you research and discover a niche market where you can either (a) serve a small portion of that hyper-competitive market far better than anybody else, or (b) serve a new market, a tiny slice of the pie that nobody has realised is worth the investment and effort. In a niche you are going to get less competition in the short-term.
Hyper-Competition is Inescapable
So we get back to the rub – hyper-competitive markets are inescapable. The moment someone realises you are making decent money they’ll be in there competing and if you haven’t exploited your opportunity to build brand equity they’ll snuff you right out of the picture. Even worse, the big danger is the second-mover behind you has learned from your mistakes.
My advice is simply this… if at all possible as a small business take option C… find a niche and work like crazy to build brand equity and relationships until you own that space. That’s your big friggen’ castle with a moat. The competition will attack. Inevitable. But at least you can win for a while and get ahead.
Oh and don’t be scared to see when the castle is falling… jump in the moat… new idea… new business… back to the options. If your underpants aren’t eating your arse every so often it’s a sign you’re not failing at business enough. Try harder.
Someone recently told me that I shouldn’t waste time on my interest in photography because everyone has high quality photography gear nowdays and there are trillions of available photographs online. What they meant was the market for photography is hyper-competitive. And so what? The market for web design is hyper-competitive, too. The trick is in accepting failure, the role of luck and in pursuing a strategy in the market aligning to A, B or C. How much money did I make by not playing the game last year? Nothing. Zero. Nix.
