In a recent academy episode, I spoke with Chris Ducker regarding saturated markets and bringing a business to life from a completely different country. He brought up a very important point about ways to win despite being in a saturated market. This is something I hear about a lot through social noise on our YouTube channel and Instagram. People comment asking if an idea is worth pursuing if the market has already found solutions to fulfill needs. This is a great question, but an invalid one.
Saturated Markets are Everywhere
There are millions of companies out there and many are doing exactly the same thing. Think about the simplest of businesses: retail outlets. They all sell the same products as competitors.
A computer company felt the need to compete with Microsoft and as a result Apple was born.
Race cars existed and Ferrari enjoyed its market share until they fired one of their employees… who went on to found Lamborghini. Today, Lamborghini has surpassed Ferrari from a revenue standpoint.
A Saturated Market Isn’t a Bad Thing
They just require different strategies to compete.
One of our academy members who went on to found a carbon fiber business that grosses over $50,000 a month also worries about competition. He always brings up the idea that competition saturates the market, and revenue goes down, in the long run.
I think of it as the exact opposite.
A Saturated Market is an Active Market
The more competitors there are, the more awareness the market will have their product niche. With more purveyors competing in a market, there are more marketing messages reaching consumers, telling them that a particular class of products or services is something they need.
This leads to marketing dollars creating a bigger pie, instead of just fighting for a larger slice of the same one. Growing the market is good for all competitors.
Market Saturation Forces Growth
Competing in a saturated market provides for a balance in pricing for consumers and helps create a better work environment by pushing companies to remain innovative and conscious of customer service.
It also forces companies to grow, rather than become complacent in the comfort of short-term success.
The Key to Competition is Product Differentiation
The worst thing you can do when entering a saturated market is to mimic the work of others or to copycat the strategies others use.
In other words, the world doesn’t give a shit about people who come in and mimic others in an attempt to gain a client base or be successful. Most consumers get a feeling of distrust right away and feel they are being tricked by an organization. Most people actually show understanding and patience towards new businesses that make an attempt to defy the status-quo, even within a saturated industry.
Consumers are always looking for something fresh, but often, we misunderstand that. We assume they are tired of the old and want something completely different. The reality is that a simple twist on a great existing concept can go a long way.
Jordan Swerdloff, (one of our academy teachers) built an 8 figure wheel business in less than 3 years in a competitive space. He simply took a concept that existed, but was never perfected, and he catered a perfected product to a completely different clientele, making his concave wheel line a huge success and his company profits soar.
Don’t look at an industry to see what your competitors are doing. Look to see what they are not doing. Then find a way to then provide that exact thing in a perfected manner that cannot be rivaled.
Being Different Isn’t that Hard
Something as simple as offering enhanced customer service in an industry known for poor service can go very far. Look at DirectTV and the way it goes after Xfinity. Knowing that Xfinity customers struggle with getting tech support, billing support and simply being treated poorly. DirectTV does that simple thing much better than other cable companies.
The same happened with early Apple products, which lacked innovation but made up for it in design. This didn’t change the fact that they made a phone, but rather that they understood the part design played in the equation.
Bringing a brand to life takes time regardless of how saturated an industry or the market is. The saturation of a market is only a testament to the need that is out there for such products and services.
The fact that so many large players want to play within the same field is a good thing, but it is important to note that consumers still love a fresh twist on an existing concept. They’re willing to be supportive of smaller competitors as long as they trust in you.