A loud, boisterous entry can be key to a startup’s longevity — especially when the competition is bigger in name, worth, talent roster, and brand recognition.
The first impression your startup leaves could be the difference between exponential hockey-stick growth and flatlining. While a new startup faces many challenges, vying for attention with big companies doesn’t have to be its most difficult to overcome; in fact, facing that level of competition can be a crucial component of your success.
Take a shot in the dark, and position your young company against an intimidating name-brand shop in your industry. Though it might seem counterintuitive at first, this tactic exposes you to new, successful business practices that you can meticulously craft into your own successful strategy.
Why It Helps to Aim High
There’s a reason “getting thrown into the deep end” is such a popular metaphor. Some thrive when challenged to get to the surface with little or no experience. For startups, swimming to the deepest part of the entrepreneurial pool has its own merits:
- • It’s a great motivator: Applied properly, anxiety pushes humans to lengths they never thought possible. That fear is good, so don’t hesitate to embrace it. Use the dread to unite your team and drive productivity. Let it challenge your creativity, then use it to your advantage.
- • Big companies have already seen it all: Established businesses make things easier for a startup because they’ve already figured out how to market a product similar to yours, as well as whom to target. You can find out a lot about a big company’s strategies by reading its blog, tweets, and other social media posts to formulate a plan of attack.
- • It results in an easier pitch process: Additionally, you don’t have to educate customers on the model, concept, or problem that form the basis of your company. Capitalize on the pre-existing awareness, and spin your startup into the solution. For example, if I say, “We are the Uber for food” or “We are the Airbnb of medical devices,” you probably have a good idea what services my company provides.
These advantages prime your startup and give it an edge over similarly experienced, less ambitious opponents. Look to big businesses to guide your young company’s course.
How to Make Some Noise
To reap these benefits, there are a few simple actions a startup can take from the beginning. Here are four strategies used by successful startups and well-established companies to help you break into an industry full of big names:
#1. Be true to you.
Identify your biggest strengths, and center your pitch entirely around them. Ideally, you provide an improvement on what’s already out there, so focus on that potential upgrade while demonstrating care for your customer. At a time when consumers seek empathy from their favorite brands, ensure that your company’s selling point is valuing customers’ money by delivering exceptional performance.
Apple maintains a 90 percent customer retention rate through excellent products and customer service. Late Apple co-founder Steve Jobs said, “You’ve got to start with the customer experience and work back toward the technology — not the other way around.”
This mindset is apparent in Apple’s track record of impressive innovations that always seem to entice customers into an upgrade. That loyalty stems from the consistent experience Apple provides across all its devices, as well as a customer-focused, performance-based product; it should be your strength, too.
2. Look to your consumers.
Strangers aren’t your best bet when it comes to fundraising, so go with your existing buyers — after all, they’ve already shown interest and invested in your startup.
Pursuing your customers as potential investors can create an avalanche effect. Those consumers spread the word about your company, which brings others on as investors capable of building a revenue cushion.
One of my company’s biggest customers is the fourth-largest hospital system in the country, but it also owns a significant portion of my business. As such, the medical provider is a big ally and advocate when it comes to expanding our sales and recruiting new investors. Start with existing customers to make raising funds significantly easier.
#3. Set up a startup supergroup.
Still hesitant about going up against a big name? Remember that there’s strength in numbers, so try bringing together a few other startups that fit with your company to provide a bundled offering.
Everyone gets compensated, even when a customer picks just one product. This serves potential customers with a variety of innovative options, benefiting everyone involved.
For instance, Spanish broadband and telecommunications provider Telefónica attracted new customers via a partnership with a startup called Social & Beyond. Retailers could solicit feedback from customers in exchange for free Wi-Fi via Social & Beyond’s technology.
Telefónica used this social media tool with its broadband deals to encourage existing customers to upgrade their contracts, thereby opening itself up to a new customer base. Group with other businesses to give all companies involved a leg up on the competition.
#4. Outshine the rest.
Don’t just differentiate your product or service from your bigger competitors. Focus on providing a level of customer experience that makes your startup stand out from the rest.
OnePlus is taking on giants like Apple and Samsung in Asia because the company’s main goal is to design a high-quality, low-cost smartphone. OnePlus aims to ensure that customers never settle for low-quality devices produced by other companies. As CEO Pete Lau explains, “We will never be different just for the sake of being different.”
The startup’s focus is on creating a superior product so the company doesn’t have to point out every little difference between OnePlus’ phones and others. Your goal should be a similar level of excellence, one that allows your startup to be seen as an equal to bigger competitors.
#5 Don’t Die Out Before You Shine
Having fun with your business is great, and so is taking time to celebrate successes. But you also need to make sure that you buttress the fun with sound business practices. This means tracking customer acquisition efforts, managing a budget, keeping accurate books, and utilizing a Customer Relationship Management CRM tool for startups or other software to help organize your contacts and tasks.
There are many considerations and numerous challenges facing a new startup, but breaking into a well-established industry doesn’t have to be an insurmountable hurdle. Learn from the best practices of your big competitors while touting a product or service that’s also better than those competitors’ offerings.
Any experience trying to penetrate a market occupied by a big-name company? Leave comments or questions below.