The Real Value Of Zagging, While Others Zig

What one company's winning adventures in Wi-Fi reveal about beating the herd.

Disruptive strategies begin with the courage to zag where others zig. If your competitors are all starting to turn left, you look right. It is actually not that hard to do. It takes no brilliant foresight. It does not require seeing what others don’t. It simply requires reading the herd. When your competitors all start running in one direction, you just need to ask, "What if I ran in a different direction?"

Consider Amped Wireless, a company launched by Jason Owen and John Lane in 2010 that makes wireless routers and related devices. The company has grown in the last five years from $5 million in revenue (from the year Jason shipped its first product) to $10 million, and it's now approaching $20 million. And this is a company that grew from two employees to 10 and now 35, with products sold nationally through Best Buy and a slew of other electronics retailers.

Jason started the company with simple insight. Manufacturers of wireless routers had fallen into the trap of following each other, trying to beat each other at the same game: building routers with greater download speeds. Their pitches started sounding the same, something like, "If you use our hardware, you will download your files and stream your videos more quickly."

As Jason explained to me, "All the industry players were acting similarly; similarly marketing products, in different enclosures, but that inside was pretty much the same. Everyone was focused on being the fastest."

So Jason decided to move in a different direction, building products that focused on reach. You’ve faced the issue before. For me, I get a great connection from my Wi-Fi router when I’m in my living room, but when I move my Netflix streaming movie up to my bedroom, across my house from my router, I have to put up with freezing images while my movie buffers.

He and his team started designing products with longer reaches, bigger antennas. Their first product was a range extender. As they worked away, four guys in a 1,500-square-foot home, they pursued their mission further, expanding into routers all pointed at extending the reach of Wi-Fi. They found a Taiwanese manufacturer to build their designs and set up meetings with electronics distributors to open up distribution. To further distance themselves from direct competition, they sold their products at 30% to 40% premium over the competition.

They picked up press coverage and, after a successful first year, launched 10 new products the second year. They continually aimed at a need that competitors were not emphasizing: reach not speed. It was a strategy they felt would work because homes in the United States are spacious, making Wi-Fi reach a characteristic buyers cared about, and because they knew the competition had chosen not to emphasize meeting this need.

Today, while doubling their growth every year, they show the power of building a business that zags where others zig. They show that your competition wants to stop thinking, that they feel it is safer to compete on attributes the industry thinks are most important. And that herd mentality creates an opportunity for the Outthinker willing to choose a different path.

Seeing opportunities like this is not difficult to do. You just need to:

  1. Look for where you competitors have stopped thinking. Where are they starting to copy each other? What need or attribute have they come to assume is what matters most?
  2. What alternative attribute or need could you pursue instead?
  3. "Do your homework to eliminate the fear," Jason advices. Do research to confirm that this alternative attribute matters to enough consumers that you can build a business around it.
  4. Finally, grow rapidly while your competitors are looking the other way.

[Image: Flickr user Jose Mesa]

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1 Comments

  • Chris

    Does this strategy translate to professional services? For example, how could an accounting firm use this strategy?