Competition is for losers.
In the world of startup wisdom, there is a common saying that “the best product always wins.” But is this truly the case? While having a great product is certainly important, it is not the only factor that determines a startup’s success. In fact, there are a number of other important elements that are often overlooked by founders who become too focused on the product itself.
One of these elements is category design. This refers to the creation of a new market or category that a startup can dominate. For example, Uber created the category of ride-sharing, and Airbnb created the category of home-sharing. By creating a new category, a startup can establish itself as the leader in that space and make it more difficult for competitors to enter. But how do you go about creating a new category? One way is to identify a pain point that exists in a current market, and then develop a solution that addresses that pain point in a unique way. Another way is to combine existing elements in a new way to create something truly innovative.
Another important element is the business model. This refers to the way a startup makes money. For example, Uber’s business model is based on taking a percentage of each ride, while Airbnb’s business model is based on taking a percentage of each booking. A business model that is well-designed and sustainable can make the difference between a startup’s success and failure. So what makes for a good business model? One that aligns the interests of the customers, the company and the shareholders.
Data Flywheel is another important element that is often overlooked by founders. This refers to the process of using data to drive growth. A data flywheel is a virtuous cycle where data is used to improve the product, which in turn generates more data, which is used to improve the product even further. This creates a positive feedback loop that can drive exponential growth. The key to a good data flywheel is to have a good understanding of the data, and to use it in a way that benefits both the customer and the company.
Finally, there are super consumers. These are customers who are extremely passionate about a product or service, and who are willing to pay more for it. They can be a powerful force for growth, as they are often willing to act as evangelists for the product, spreading the word to others. To identify super consumers, it’s key to understand their behaviour and to find ways to engage with them. Once you have found them, it’s important to nurture them, as they can help drive growth for your startup.
In conclusion, while having a great product is certainly important, it is not the only factor that determines a startup’s success. Other elements, such as category design, business model, data flywheel, and super consumers, are just as important. Founders should not over-tilt on product but rather consider all the other key elements that can make or break a startup. As the famous entrepreneur, Peter Thiel said, “competition is for losers.” The real key to success is creating a new market and dominating it. So, ask yourself, what new category are you creating? What’s your business model? How are you using data to drive growth? And who are your super consumers?
To learn more about category design, I recommend reading “Play Bigger” by Dave Peterson, Al Ramadan, Christopher Lochhead, and Kevin Maney. To read more about others who have made and dominated playing fields in other arenas, read “David and Goliath” by Malcolm Gladwell.
About the author: Shane Allen is an accomplished entrepreneur and marketer currently serving as the Director of Marketing at PickNik, a company that specializes in developing software for robotics both on Earth and in space. With a Bachelor’s degree in Industrial Design and a background in mechanical engineering and business, Shane brings a unique perspective to his role as a marketer.
He has successfully raised six large rounds of investment for his inventions as a CEO, has multiple patents to his name, and won multiple pitching events worldwide. His expertise in both marketing and product design has helped him to create innovative campaigns that drive growth and results for the teams he’s involved with.
When he’s not working, Shane can be found exploring the beautiful trails and mountains of Boulder, CO with his golden retriever Bandit. He is also an active member of the local startup community and is passionate about helping other entrepreneurs achieve success.
