Breaking Into An Overcrowded Market: Is It Ever A ‘Sane’ Decision?

“If you come in late, you have to have a bloody good reason for the consumer to switch”

-Tim Ambler

The New Norm: Supply Exceeds Demand

We’re all scre*ed.

Yes, even you. Your ex-boy/girlfriend was right!

In case you’re wondering, I am of course talking about startups…

Whaaat?

Well, kidding-aside, here’s the thing – despite in which industry you’re about to enter (as a new startupper) the story is pretty much always the same:

The supply of products exceeds demand.

Put differently, unless you’re going after a brand new market category (which statistically speaking is more the exception than the rule) you’ll have to face an overcrowded market.

Yep, a market packed, big time, with competition!

And for some, that alone is kind of deal-breaker…

Why I hear you ask?

Ok, let’s start digging.

Is Entering A Crowded Market Worth The Gamble? NO

So, why many suggest entering an over-saturated industry should be a non-option?

A couple of reasons:

Reason #1: It makes it much harder to make it

The underlying assumption here is straightforward.

Unless you have a completely unique good (or alternatively something which is WAY BETTER than what is currently out there) attracting people with the will to even give you a chance becomes almost a mission impossible due to the myriad of rival offers.

The bad news?

You probably don’t have that product.

Or at least that what the claim is!

And for driving that point home, the advocates of this school of thought, back-up their claim with a bunch of, wait for it…

…startup failure rates statistics.

Love them or loathe them, are here ‘to tell the truth’.

I know, sad isn’t it?

Reason #2: It makes it much more expensive to break through the noise

That’s right – if shrinking (success) odds were not bad enough the increased marketing costs come to make things even more miserable.

And this is only natural!

Why is that?

It’s simple – one of the biggest challenges for new products is attracting the attention of the right people at the right time and…

with a market packed with competing products,

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Instant Gratification: Must have or maybe just overhyped?

“Discipline is the bridge between goals and accomplishment”

– Jim Rohn

The Power of Now

How long does it take your product to deliver on its promise?

If your answer is ‘a couple of weeks’, you need to change that.

Or at least that what the claim is!

But why?

Introducing instant gratification…

Say what?

Come on – I am sure most of you came across this term hundreds of times.

But just for the sake of consistency here is a formal definition from our good friend Neil Patel:

“Instant gratification is the desire to experience pleasure or fulfillment without delay or deferment. Basically, it’s when you want it; and you want it now”.

I know, there is much talk these days about the ‘age of impatience’… 

… and of course about the companies riding this trend by offering products that tap into 21st-century consumers’ universal desire for instant gratification.

A couple such examples?

Here you go:

Spoonrocket (on-demand lunch in 10 minutes)

Hanic DC Aqua (transparent white teeth makeup)

PostMates (any product from any store in an hour)

Toppik (hair building fibers for instant full thick hair)

Amazon Prime (one-day delivery)

FedEx (overnight package delivery)

And the list goes on.

Today’s question?

Is instant gratification a must have or maybe just overhyped?

Ok, let’s start digging…

The Case for Instant Gratification

So, why people think building instant gratification into your product has almost become a must have in today’s market?

Here are 3 reasons to get you started…

Reason #1: Is not just expected but demanded

Yep, in line with what we said before the conventional wisdom suggests that today’s customers:

a) Hate waiting (or at best have little tolerance for it)

b) More often than not expect instant results as a given

c) Have little to no loyalty and are happy to shop around until to get what they want

The moral of the story?

Deliver instant gratification or die.

Reason #2: It plays on your advantage (due to the hyperbolic discounting principle)

What’s that I hear you ask?

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‘Mini-Me Targeting’: A Great Business Strategy or Maybe a Curse in Disguise?

“Vague direction leads to misalignment every time”

– Greg McKeown

My Target Group Is…

Startupper struggling to decide who should be your target audience?

Here’s an idea.

Pick yourself…

Whaaat?

Yes my friends – I am of course referring to the classic business strategy of going after people like you.

Or as Tim Ferriss likes to put it “be{ing} a member of your target market”.

But what’s the logic behind this advice?

And most importantly: is it any good?

Ok, let’s get straight in…

Mini-Me Targeting Is Here to Stay: Here is Why!

So, what’s the reasoning?

According to the ‘mini-me targeting’ supporters it mainly boils down to these 2:

– You build a product (& go-to-market plan) faster and better

Yep, knowing intimately your target group – which happens by definition when you’re one of them – gives you a great head start because…

…you’re already ‘inside their head’ & understand deeply stuff like their motivations, pain points, life situation, concerns, what they like, buying habits and much more.

The alternative?

Starting with a clean sheet, which quite often ends up being the reason you have to:

a) Carry out extensive market/customer research (which btw yes it takes time)

b) Make a ton of customer and market assumptions (or guesstimates if you will)

b) Unnecessary go through multiple iteration cycles until to figure out which of your assumptions (from your research findings) are true and which are dead wrong

The moral of the story in a sentence?

You guessed it – building stuff based on facts (and first-hand experience) and not assumptions is always better!

–  You have a better founder-market fit

Ok, this own is pretty obvious…

Being one of them makes you more relatable.

And especially when it comes to selling that’s pretty important.

Why?

Our friend Scot couldn’t have put it better:

“People like people that they can identify with. There’s an inherent sense of understanding injected into an interaction when you connect on something.”

That’s right – in business as in life, people tend to feel more comfortable around people like themselves…

Just think for a moment: when was the last time you bought something from a business based on the relatability factor?

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Going All In vs Starting On The Side; Head to Head Comparison…

What separates successful startups from unsuccessful ones is not necessarily that they began with a better initial plan (or Plan A), but rather that they find a plan that works before running out of resources.

– Ash Maurya

Starting a business…

“I am starting my own business!”

There you said it.

Every startup enthusiast at some point in his/her life comes up with a business idea s/he thinks it too good to miss…

And even though that’s not necessarily the best way to start a business (hint: mainly because of the solution looking for a problem situation/risk), there still is a key question that needs to be answered:

Going all in or starting on the side?

That’s right – I am talking about the age-old dilemma: starting a part-time vs. full-time business.

And as you may imagine there are pros and cons to each option.

So, what today’s post will be about?

No surprises here. Taking a closer look at each one of them, doing a head-to-head comparison and deciding whether there is a clear winner or not…

Ok, let’s dive straight in.

Thinking about going part-time with your startup; Stop!

First, let’s start from the camp that thinks having a part-time business is a terrible idea.

Yes. Terrible…

Why is that?

Well, according to the “going all in or don’t bother at all” believers… a couple of reasons:

Reason #1: Lack of commitment (and time)

Classic, right?

I know…

Anyhow, the point here is that by juggling a job with a part-time business not only you risk jeopardising your work performance* but also slimming the odds of ever seeing your “newborn baby” take off.

And that last one is because since turning an idea into a success has time and time again proven to be more the exception than the rule, by not fully committing (both mentally and time-wise) you are self-sabotaging yourself and selling your business short.

Reason #2: Not driven enough for turning it into a real business

Why, I hear you ask?

Because in the opinion of the sidepreneur’ opponents you become more like a ‘startup hobbyist’ and end up not having the necessary drive for turning that thing into a real business.

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Not solving a “tier 1 problem” is a recipe for (startup) disaster: Or maybe not?

“Timing, perseverance, and ten years of trying will eventually make you look like an overnight success.”

– Biz Stone

Tier 1 Or Nothing

2 weeks or so ago while scrolling down my Facebook’s newsfeed I stumbled upon this eye-catching (business) quote:

If your startup failed, it’s because it didn’t solve a tier 1 problem for a large enough audience.”

Which was a post intro from a guy named Mitchell Harper, a big shot ‘exited entrepreneur’.

His point in a nutshell?

Unless you solve one of the top 3 problems your target customer is experiencing you’re scre*ed!

Yep, irrespective how good your product is if you don’t abide by that ‘market reality’ you will fight an uphill battle.

And that made me thinking…

Is that claim any true?

Or maybe another classic business BS as usual?

Since it’s not an easy one we have to do a bit of digging.

Painkillers, Vitamins, Oxygen Or Vaccines: Which One Is Your Product?

First things first.

Why does Harper think that way?

In his own words…

…“[it’s because], they’ll be so focused on solving their first 3 problems that you’ll never get a look in… They simply won’t have time (or budget) for you if you’re not solving a problem that’s top of mind for them — a tier 1 problem”.

And that brings us to the old-age business dilemma:

Vitamins vs painkillers!

In fact, over the last couple of years, some additional elements got blended into the mix (and yes, I am of course referring to oxygen and vaccines).

Just in case I lost you, let me explain these analogy-driven terms really quick:

1. “Painkiller products”:

Two words…

“MUST HAVES”

Yep, these type of products fall under the essentials category.

And another common characteristic of them is that they provide an almost immediate relief.

Some classic examples?

Gasoline, electricity, internet, telephone, just to name a few.

2. “Vitamin products”:

The main alternative to painkiller-products?

You guessed it…

Vitamins (aka “as nice to haves”).

Said differently,

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