For an entrepreneur, one of the scariest ideas can be launching a business in a niche or market that already has plenty of competition. Startup founders might ask themselves, “What’s the point in doing this? There are plenty of other businesses already doing what I’m thinking about doing.”
Even if there may be reasons to stay out of the business, there are also plenty of reasons to go ahead and dive into the business. Here are five excellent reasons you should not avoid starting a business that already exists.
1. There is always room for improvement
While the competition might be doing a lot of things right, you’re sure to find things that they’re doing wrong. You can capitalize on that knowledge and build a business that does it better. For example, OrthoticShop.com was launched even though other businesses like Zappos were already quite successful in the industry. The founders knew they could do it better, though, and the success greatly exceeded their expectations.
Brian Crane, founder at CallerSmart, adds “nobody dreams up and launches a brand-new business in my opinion. Instead, new businesses are iterations of previous ideas, made better. When Google launched, it was designed to be a better search engine than Lycos, Yahoo, etc. When Facebook launched, it was designed to be a better social network than MySpace, Friendster, etc. Starting a new business based on improvements you’d like to see made to an existing business is only natural.”
2. The market already exists
Marcus Miller, the managing director of Bowler Hat and wArmour, says starting a business that already exists could be described as “the easier and more sensible option. An existing business has existing demand and a ready made audience. If you start something new, then you have to work double hard to educate people as to why your business exists and why they should do business with you.” Miller’s two successful businesses are proof positive of this, since the market for Web design and Internet marketing, as well as cybersecurity and maintenance, are already strong fields with plenty of demand.
Casey McCallister, Director of Marketing at SmartShoot, believes that competition is a good thing. “Companies need competition to be successful. It pushes them to make better and more functional products. Microsoft and Apple both push each other to be better. Canon and Nikon. Marriott and Hilton. Without competition, companies have little incentive to innovate,” says Casey.
3. You can put a unique spin on the product
Every business is different, and you already know that you have to differentiate yourself from your competition. A good way to do this, as well as compete in an existing market, is to put your own unique spin on the idea. For example, DuckDuckGo is a search engine competing head-on with Google. Google has very little concern for your privacy, tracking almost every move you make on the Internet.
DuckDuckGo, on the other hand, does not track any personal information, and that key difference has driven the company’s growth over the past couple of years. While DuckDuckGo will likely never replace Google, the search engine has carved out its own small and very profitable niche doing something similar to what Google does, but with a unique twist.
4. Businesses must evolve or die
Culture is perpetually changing, and businesses must evolve to stay with the times. The business that stops serving the needs of its customers, or continues to operate in a way that is neglectful or dismissive of the customer’s dignity, cannot last.
Hans Enriquez realized that, and the idea that businesses must evolve or die was the impetus behind him launching LazyDaze. Enriquez “knew that the typical ‘smoke shop concept’ would need a complete revamp from its dark and dingy storefront,” and knew that he could bring that value to the market.
Enriquez launched LazyDaze to be a smoke shop with the look of Urban Outfitters, the customer service of Nordstroms, and the convenience and high quality products of Macy’s. This evolution resulted in a counterculture business that is thriving and opening new franchises regularly.
5. The need is still outstripping the demand
One company (or even a dozen companies) can rarely fulfill the needs of the entire marketplace for a product. There is usually an opening to market your product to others who have not yet made the leap, or have purchased a product from a competitor and not been totally satisfied (see point #1 above).
This gives you, the budding entrepreneur, the opportunity to fulfill the need for the product, and do so even better than anyone else has done before. Yellowball, a digital marketing firm, entered a market that was already quite saturated. However, by ensuring they delivered the results their clients needed better than their competition, Yellowball was able to thrive even as a latecomer to the party.
There you go, five strong reasons why you should go ahead and open your business even if there is already competition in the marketplace. The free market economy is beginning to boom once again, and there is always room for new players.
If you play your cards right, your unique spin on an idea or improvement on an existing product could result in the next iPod or iPhone.
Featured photo credit: Pexels via pexels.com