Where to Start

Posted by Eric Lomax

Should you mimic someone else’s business or create your own? It’s easy to assume that if a business idea worked for someone else it’ll work for you but that is often furthest from the truth. Customers will seek you out because of your differences, not your similarities. No one chooses a store or site because it provides the same products, selection, or prices. Also, consider that larger competitors always have advantages over smaller ones. They offer larger selections, more options, and better prices. If you provide what everyone else does, you need to sell it for less, ship it faster, or support more options. Too many solo entrepreneurs think that there is safety in numbers but copying others does not reduce the threat of competition. It increases it.

When dolphins find a school of sardines, they corral the fish on all sides and the bottom. This forces the school to swim to the surface and condense into a tight bunch. The dolphins take turns darting through the dense clump while flocks of seabirds dive from above to pick off their meals. The blood and commotion attract other large predators and all enjoy the buffet — except the sardines.

Amazon nearly eradicated small bookstores, Home Depot decimated local hardware stores and Walmart crushed the idea of a family-run store. These small companies were sardines that swam in schools. They offered the same products, the same services, and the same value as other sardines. If your company mirrors others, it may become a menu item as well.

A single fish is too small of a meal for a school of predators. Had the small businesses simply fled in separate directions the predators would have left hungry. That means offering unique products, reaching new customers, or delivering products in new ways.

Unique Products

Everyone has rushed out of the house and forgotten a phone, wallet, or something. Imagine you walk into the office door and can’t remember whether you took this morning’s medications. Do you take two when you get home or count the pills remaining in the bottle? Every week, millions of people remove medicines from their bottles and organize them by a designated time and day. The process reduces the risk of forgetting a dose or taking extra. One company sees this as an unnecessary step and provides a solution.

Pillpack labels and sorts medications by the day rather than by their type. Monday’s packet has all of that day’s medications. Tuesday’s, Wednesday’s and so forth all have the same. Pillpack reduces the risk of missing a dosage or overmedicating. The company creates distinctive value by solving a problem traditional pharmacies do not.

New Customers

How does someone learn where to make the first investment? Investing isn’t taught in school so most investors learn through trial and error. For many, this is a scary and costly education.

Complexity causes inaction, and new investors have no idea how or where to start saving. Mutual funds or individual stocks? Balanced or sector? Index or actively managed? The alternatives overwhelm the new investor who believes that missteps would be unrecoverable. One mistake feels like it could be the difference between growing old comfortably and losing hard-earned money on a gamble. The number of choices and complexity of products inhibits many from saving.

Acorns targets the new investor that lacks a war chest of cash. It leverages customers’ existing spending tendencies by investing a portion of every purchase. A customer might spend $19.65, and Acorns rounds up and invests an extra $0.35. it only offers a handful of choices, which reduces the complexity It promotes saving without requiring the customer to behave differently.

There is no need to budget for regular withdrawals or sift through countless investment options. While typical brokerages seek savvy investors with cash reserves and established savings habits, Acorns prefers early investors who are learning the intricacies of financial management. It creates value for customers that other financial institutions failed to service.

New Delivery Methods

Oddly enough, many of our personal interactions are no longer performed in-person. Social media connects people digitally and has become one of — if not — the most common ways of keeping connected. We video chat with friends and family. We telecommute to work, teleconference with customers, and text friends rather than talk to them.

Meetup detaches people from their devices so they may interact face-to-face. It allows members to create and join groups focused around shared interests like traveling, networking, or what have you. While other technologies enable customers to post activities online, Meetup members experience them. It delivers value to customers in a different way than other online services.

Where to Start

Pillpack, Acorns, and Meetup offer different solutions, provide existing solutions to new customers, or find unique ways to distribute products. Whether you create your own niche or select one, successful companies solve customers’ problems in unique ways. While other entrepreneurs swarm, school, and clump together, these companies and yours swim alone

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