Time and again we see conventional wisdom go out the window and the underdogs triumph.
Stories like that of Team USA defeating the mighty Soviets--by far a more professional, experienced, and skilled hockey team--can teach entrepreneurs an important lesson.
Such stories show that it’s possible to defy the odds and become legends. Industry kings are not impossible to dethrone, but you’re going to need to do things a whole lot differently than they do to do it.
Here’s how you can to play to win in your own right:
No one is perfect. In fact, we’re all pretty far from it. This is even the case for the most seemingly successful businesses. There is always something--and usually a lot of things--that they’re not doing as well as they could.
Try to figure out why this weakness exists and what it really means to your competition. If the mistake causes friction between the company and its customers, whether or not the customer realizes it, you might have something.
In many cases, this proves to be a price-to-value issue. Any mature business has spent time driving cost out of its product to improve profitability, and if there’s a lack of competition in the category, you can often hit the competition first where it hurts the most: their wallet.
When you’re new and little, the big guy is going to ignore you--they always do. They feel invincible, and when they find out about you, they dismiss you. They’ll say things like “their business model can’t be sustained” and “let’s see what happens when they encounter X, Y, or Z.”
Their first line of defense is usually a team of middle-managers that don’t live and die by a P&L like you do. They don’t realize that you already know exactly what will happen when you encounter X, Y, or Z, and the A, B, and C they haven’t even thought of yet.
Let them hate because every day that they don’t try to compete with you, you’ve got an open-mic to the rest of the world to shout about every single way you’re better than them. Here are some jabs you could throw their way:
- Better prices (dare them to compress their margins)
- Better materials (dare them to increase product cost)
- Better customer service (dare their CEO to get on the phone with a customer)
- Better product (dare them to fix the things that are broken with their product that they’ve gotten away with)
Is the worst-case scenario that they start competing with you? Nope. That will put you on the map too. But trust me, they won’t acknowledge you until it is really impacting their business--so, they’ll either validate you or buy you, which is most likely a win-win.
When was the last time you received a personal email from a CEO of a Fortune 100 company whose products you buy? Unless the CEO is related to you, probably never.
What about a hand-tied bow on the box your product arrives in? Or a free product just for tweeting about a company? Or even your feedback on a product actually incorporated into a future release with a credit to you?
The point is, your smallness can be a huge advantage. Big companies aren’t set up to do the little things. But your customers will love them. They’ll love knowing that they’re connected to you and that their business is truly valued. Customers are your most important shareholders, and that’s never easier to see than when you don’t have any others.
Obviously, competing with a collection of massive, well-funded businesses is no walk in the park. Success is going to start by believing that you can do something better and in a way that they will have a very, very hard time competing with.
People have wondered why I founded Boll & Branch with my wife and entered the bedding business. It’s a category that is dominated by a very small number of massively successful companies who also control the retail channels.
My wife’s frustration in purchasing sheets gave me the idea that there might be a better way for customers to purchase them. Diving deeper, we found a whole host of vulnerabilities with the big guys ranging from 4% to 600% markups to sweatshop labor and poor-quality cotton.
In just a few months, Boll & Branch has become one of the fastest-growing brands in the entire home textiles category. We’ve sold thousands of sets of sheets because we believe that a 50% margin is plenty and that Fair Trade costs needn’t be passed on to the customer.
Will the big textiles brands compete? No clue. Do they even know we exist? Not sure. But, we’re growing quickly and relishing our role as the underdog.
--Scott Tannen is CEO of Boll and Branch.
[Image via Shutterstock]