No one ever said startup development life was going to be easy. Those who have decided to become entrepreneurs do so out of passion, belief in their product or service, and a desire to do something different and make a mark. However, no matter how much passion you have and how hard you work, you may find that your venture has become an increasingly crowded marketplace and that you now have to fight for customers who have multiple choices.
Do you feel your competition has altered the playing field? Do you wonder how you can adapt to this new reality to ensure your startup’s success? As any startup consultant will tell you, competition is healthy. It makes for a more colorful startup landscape and breeds innovation and imagination. The key is to identify ways to crush the competition and solidify your place in the market. Below are four tips to help your startup out.
Direct vs. Indirect Competitors
Before we dive into our startup tips, it’s important to make the distinction between direct and indirect competitors. A direct competitor is one who sells similar products or services, and can be especially challenging for the entrepreneur who deeply believes that their own offerings cannot be rivaled. An indirect competitor, on the other hand, is a business that competes for the same customer dollars, but may be in a different sector.
For example, let’s say your startup’s main product is a food-delivery app targeting employees that need lunch at their offices. Direct competitors would be companies like GrubHub and Skip The Dishes, which also deliver food. Indirect competitors would be startups that also target employees at their offices, such as exercise apps that employees might use on their lunch break, instead of ordering in food.
The following tips can be applied to both and can help you grow your startup even when competition is fierce.
TIP 1: Solidify Your Unique Value Proposition
Sure, your competitors may be competing for the same market share, but can they do it as well as your company? It’s your job to make sure potential customers know what your competitive advantage is. What sets you apart from the rest? Is it price? Customer service? A unique feature that your competitor can’t match? Whatever your unique value proposition may be, make sure it is featured front and center in your branding and marketing campaigns, as it will remain an integral component of your startup growth strategy.
TIP 2: Develop an Effective Marketing Plan
When it comes to crushing your competition, your startup marketing plan needs to knock it out of the park. Whether that includes creating social media buzz, micro-targeting a very specific marketplace, or emotionally appealing to your ideal customer, you must make sure the plan is communicated effectively to all members of your team and dovetails with your value proposition.
For startups, influencer marketing can be an especially effective approach that involves partnering with a well-known social media personality or celebrity to endorse and promote your product. Teeth whitening tech startup, HiSmile, for example, had a lot of success working with Kylie Jenner. HiSmile would send Kylie free products in exchange for her Instagram posts touting their products. Kylie Jenner’s followers would see the posts, and connect to HiSmile’s products by either following a social media account or subsequently purchasing the products directly. Ultimately, the company converted thousands of Jenner’s followers into customers. This worked because Kylie Jenner had positioned her brand as being luxurious and desirable, attracting 82.6+ million followers just on Instagram alone and netting over $28 million last year between her product endorsements, modeling, TV appearances, and social media ads. Her personal success has not only skyrocketed over the past few years, but her influence on and affiliation with HiSmile helped the company grow exponentially.
TIP 3: Focus on Positive Cash Flow Resulting From Loyal Customers
Many of your competitors will come out of the gates swinging with ultra-low prices, aggressive marketing campaigns, and a seemingly unlimited budget. Guess what? This type of fire tends to flame out quickly—especially if the startup doesn’t have the cash flow to keep up the pace. One way to crush the competition is to slowly and methodically build up your client base and returning customers. This ensures that when all your competitors start to feel the heat from dwindling resources, you can use your cash flow to pull ahead of the pack.
TIP 4: Work with Mentors Who’ve Been There
No matter how good your plan is or how well-positioned in the market you believe your startup to be, there is simply no substitute for experience. If there is one thing most startups lack, it’s time in the business world to learn real-life lessons. That’s why it’s imperative to engage startup expert help from those who have been in the trenches. When you work with mentors who are experienced in the startup world, you can learn from their mistakes without having to make them yourself, and multiply your chances of success.
As former President Dwight D. Eisenhower famously said, “What counts is not necessarily the size of the dog in the fight; but the size of the fight in the dog.” Make sure your startup has more fight than the competition with a unique value proposition, a strong marketing plan, a loyal customer base, and don’t forget to reach out for help from mentors who’ve been there. If you’d like to talk to our growth hacking experts about how to tackle the competition, please visit our website.