A couple of weeks ago, the Transformational Business Coach Jen Hall emphasized the importance of having a strong ‘why’ at the core of your business. Today, I’d like to go more in-depth on the idea.
Generally speaking, there are three ways a business can get a competitive advantage. You can either:
- Do something cheaper than anyone else
- Do something better than anyone else
- Do something that no one else is doing
For natural reasons, lowballing your competition is extremely difficult. You either have to establish connections deep inside the ‘enemy territory’ to get an extremely good price on the supply or create an extremely effective production process in order to be able to sell for less without sacrificing your profit margins. Which is possible, but unlikely in the case of a freshly establishes small business.
This is even more true to companies adopting the Blue Ocean philosophy – businesses that offer completely unique products or services, creating uncontested verticals, instead of fighting for breadcrumbs in competitive industries. While the allure of creating the next Facebook or Apple is every entrepreneur’s wet dream, the majority of ‘ingenious’ business ideas – such as the one your roommate is obsessing over at the moment – never see daylight, and for good reasons. Which, again, isn’t ideal if you’re actually planning to make money off what you do.
What’s left for new small businesses is to try and gain a competitive advantage by offering something that’s just better than anyone else’s.
It doesn’t have to be something big. You don’t have to beat an entire industry. However, if you can excel even in the tiniest of niches, and be an undisputable leader in that specific niche, you’re on the right track.
Think best gaming mouse-pads for girls. Best superman Christmas gift socks. Best Trump joke writing services.
Being the best in any vertical immediately separates you from the competition. There’s the iPhone, and then there are the rest of the phone brands. There’s AirMax, and then there are the rest of running shoes.
As a small business, establishing this undeniable lead even in the smallest of industries is one of the most reliable ways to generate those first customers and make a name for yourself. Once you get rolling, you’ll be able to expand, but failing to stand out in the very beginning might set the whole business up for failure.
So, what about the ‘why’?
However, making a name for yourself even in the most ridiculously narrow niches can be a tough task. And, most importantly, it never works if you’re just doing it for the money.
A big part of creating the best product or service is genuine, unquestionable dedication. I’m talking sleepless nights and never-ending thoughts on how to make the product or service even better. I’m talking showing your idea to everyone who’s interested (and also to those who aren’t), and endlessly testing your prototypes. It’s hard to find that kind of dedication if you have no personal interest in giving birth to the best possible version of your product/service.