As you’re reading this sentence, somewhere in the world an entrepreneur is being asked, “But what if XYZ company decides to build this as well? Plus there are already ten companies doing what you are attempting. Here, look at this article from TechCrunch from yesterday, another competitor just launched. The industry seems crowded. How can you possibly make a dent?”
Many times the person asking is looking out for you. They don’t want to struggle in an industry where you may get crushed. Sometimes they are projecting their own fears of failure onto you. Regardless, it’s most likely coming from a good place. It’s also terrible advice.
We are only supposed to chase blue oceans. Go where no company has gone before. That’s what ALL successful businesses do right? I’ve never bought that and still don’t. It ignores one of the most obvious aspects of the any typical industry marketplace that is right in everyone’s face. Something that gets downplayed and ignored for how great of an opportunity it is.
Pick a large established industry. Something in the $10BN a year or more size. Any one will do. Doesn’t make a difference, as this is something of a universal truth. What you will typically find is a group of companies that don’t treat their customers very well. You’ll find some outliers, who still seem to genuinely care, but more likely you’ll find a ruling majority of increasingly soulless, quarterly number driven, corner cutting behemoths.
You’ll find companies that treat their customers as a necessary burden. That view them as wallets that are unfortunately attached to a pulse. That these customers have these aggravating things called “opinions” and “needs”. Sometimes, as it seems in the telecom world, that you are supposed to be grateful to be given the privilege to use their service.
You will find the big opportunity inside these industries has nothing to do with new amazing technologies. It’s treating customer like they are worthy of something greater than disdain. It’s treating them with respect, kindness, and trying to bring a little joy to their life. It’s sad, but many times not treating your customers like garbage gives you an immediate advantage over all the existing competitors.
That’s what my previous co-founder (Lev) and I did when we started InsuranceAgents.com in his parent’s basement back in 2004. It was a horribly boring industry (insurance marketing), but it was a couple billion dollars a year in revenue in size, with about a dozen existing competitors. Most were in the tens of millions in revenue and a few were in the hundreds. We were the tiniest new fish in a large pond.
In 2004–2005 we did $252,000. That was maybe 0.00015% of the industry wide revenue. No one noticed we existed. No one cared. By 2008, we were doing almost $12,000,000 in revenue. We finally had our competitors attention. These two kids from Columbus, Ohio appeared to be selling the exact same thing they were, but they couldn’t understand why our customers and industry partners seemed to be happier, more likely to buy again, and more likely to recommend us to other agents.
We didn’t have better technology. Our tech was terrible. It was the weakest part of our entire business. We did have great sales people, but that will only get the customer in the door. Most important to our growth, was we had a customer support staff whose sole purpose was to do anything possible to keep them happy. We focused on being the most customer service focused brand in our entire industry. That was our “defensible” strategy as investors like to hear. To carve out a chunk of the market by not being an asshole to our customers. We would leave that instead to our competitors. And it worked.
So, as you look at any crowded market, try to see what percentage of the marketplace is controlled by bad actors. Ones who seem hell bent on forcing their will on customers as opposed to treating them with respect. Anywhere you find that (finance, transportation, telecom, etc…) you will find tremendous market opportunity for new companies to enter and grab market share by using The Golden Rule.