Launch a Startup | Day 2

 “Create. Don't Compete.”

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Launch a Startup | Day 2

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Today I picked up from where I left yesterday: New Market.

How's a new market different from an existing market?

I read a very interesting book, The Blue Ocean Strategy, and it sheds light on the fact that most businesses enervate themselves by competing other businesses. This is the curse of an existing market. There are a lot of examples in the book that corroborate this theory.

Let's see all the important points we know:

Existing Market or Red ocean:

• main issues
  • bloody rivalry - compete in existing market place
  • if you want to make money - beat the competition to sell
  • shrinking customer value - because there's no bargain chip for the seller
    
  • commoditization of products
    
    • only 2 ways to sell
      • increase value
      • decrease costs
• example:
  • aerospace market - airlines
  • food delivery market - swiggy, zomato
    
  • payment apps - paytm, phonePe, etc

New Market or Blue ocean:

• main attributes
  • unexplored market space
  • makes the existing competition irrelevant
    • same domain - different space
• Example
  • Yellow tails
  • CitizenM
  • Samsung
  • worked on its existing technology, innovation and R&D 
  • started new products of phones that shift from phones to smartphones by issuing its android operating system 
  • created new segments in addition to make partnership with Google
  
  
  
   
  • Apple 
  • created its own innovative ios & Apple store 
  • gave the company a unique competitive advantage and not easy to imitate
   
  

I've mentioned Innovation twice above. What is it?

Innovation

• Value innovation
• increase in value for customer
   
• Tech innovation
• new tech doesn't always create the blue ocean
   

 

Ok. An idea has begun to form.

How do I systematically look for Blue Oceans?

• STRATEGY TOOL 1
  • how do you create blue ocean?
    • understand the current business model of your industry
    • look where your rivals are investing
    • what factors drive the business? is it -
      
      • product innovation
      • price
      • customer service
      • delivery
    • what value are your customer deriving?
      • value curve
      • customers often use a product for different reasons than you might think
       
      
    • Four Actions Framework
      • 🠉 | Raise
      • things that should be raised well above the market level
      • 🠟 | Reduce
      • things that can be reduced below the market standard
      • ❌| Eliminate
        • things industry takes for granted
      • 🆕 | Create
        • things that industry has never offered

Example:

Yellow Tail Wine | one of the top-selling wine brands in the world

 

Four Action Framework | Yellow Tail

 STRATEGY TOOL 2

• Reaching beyond existing customer
  • customer acquisition rule
    • retention is most important
  • Finding non-customers
    • customers of a related/similar market
    • then offer them better value
     
    

 Example- [Yellow Tail]

Didn't take over the existing Wine drinker market. Instead made their product easy for Beer drinkers.

 All the best for your startup.

 Until Tomorrow!

 - Read India Lead India