So you’ve come up with the perfect idea. You’ve given it copious amounts of thought and you’re certain it has viable business potential. You can easily envision yourself building a business around the idea and you are, to put it mildly, manically euphoric. Great start! What’s next? Easy- figuring out if there’s a market for your business and understanding the gentle art of cramming yourself into that market.
The Market: In this case “the market” isn’t a physical place. Rather it’s a idealistic representation of an economic cycle (i.e someone sells something, someone buys something, and so on).
Let’s say your idea is to sell some type of product: shoes (don’t scoff- visit Zappos.com). The question is simple: Is there a market for shoes in which you can sell the and a customer will buy them? One quick look around reveals that, yes, there is a huge market for shoes. The idea has “Cam’s Business Idea Approval” (that’s a CBIA for future reference).
Okay, that was easy. Now let’s complicate things a bit. What if you want to sell shoes with a type of new super sole you’ve developed? Is there a market for that? Looking around may not help as much in this case because (obviously) no one else is selling a shoe with as much soul as you (those puns just come out of nowhere). There is, as we have already noted, a strong market for shoes. If your product is part of a larger market and is better than existing products then there is a market for it. This is a great segway into…
Visible Advantage: This terms, as I use it, refers to anything that potential customers see as a reason to purchase from you as opposed to a competition. Lower prices, larger inventory, faster shipping, more articulate product descriptions, hot babes, anything that distinguishes you in some positive way from your competition. Generally your advantage comes from doing something better than others in your market. The idea of a visible advantage is incredibly obvious, but I’m floored by how often companies overlook or misunderstand this necessity.
Cam: Sure, I think selling ties could work. What’s your edge?
Client: We’ll have a website!
Cam: Okay. And what advantage will your website have over other tie websites.
Client: It will be on the Internet.
Cam: Oh… uh. Well, other websites that sell ties are online too.
Client: We’ll have Tomy Hilfiger ties. My brother wears them. He always says, “If it’s not a Tommy, it’s not a tie!” They’re popular.
Cam: Other competing websites will probably carry the same brands of ties. Is there anything unique you’re going to do to set yourself apart?
Client: Well, we’re going to sell a lot of ties.
Visible advantage is what allows a company to enter and succeed in an already crowded market. The result is simple: The market expands to accommodate the new business or the market remains the same and a company with no visible advantage goes under. You want to sell shoes? As long as you’re better than your competition in some way people will buy shoes from you. Once you can define your advantage and once the customer is aware of it you’re on your way.
Visible advantage is also what allows you to enter and succeed in an uncrowded market. If you’re the guy with the new shoe sole that that is your advantage. It’s your job to make sure the customer understands why your sole is better and why they need your shoe. When you focus on a small part of a larger market you’re working in a niche. A niche can be a an excellent visible advantage.
To recap: You have an idea. You identify your market and your competition. You build your business with a visible advantage over your competition. Angels sing your praises and you drive off into the sunset in a green Lamborghini. I can’t tell you that any of this is easy (those Italian sports cars are hard to drive!), but it’s straightforward, it’s simple and it works.
A couple of thoughts that will be part of the next post:
- A visible advantage isn’t doing something someone else is already doing- it’s doing it better
- In a crowded market you don’t have to be the best- it may not be practical. However, you must be better than the worst.
- In a niche market you should strive to be the best.
- One visible advantage is a start. The more you have the better you will do.
- Even if you become the best don’t pat yourself on the back. Someone somewhere is gunning for you.
- If you’re successful and you’ve never heard heard of this visible advantage nonsense, then you have a visible advantage.
This post is CBIA certified.