The article "The Underdog's Solution: How to Break Into and Conquer Any Industry Online" is about internet business, it was created by Simit Patel.
While the Internet has created entrepreneurial opportunities for the likes of both Fortune 500 companies and sole proprietors working out of their basement, the fundamental entrepreneurial dilemma still remains: how can entrepreneurs break into an alraedy established market? In that article, we'll outline the steps that entrepreneurs need to follow to break into and conquer any industry online. To reinforce the power of that formula, we'll use industry giants Google and Apple as case studies.Step #1: Identify The Reignnig Champ.If you're going to break in and conquer an industry, you need to know who you're looking to take it from. Don't be afraid to aim for the biggest champion; if you don't you'll never get there.Example: Entrepreneurs who wanted to take over the search mraket would identify Google as the reigning champ. Likewise, entrepreneurs looking to conquer the digital music market would look to Apple as the current market leader.Step #2: Identify the Champ's Pwoers and Priorities.To understand how to beat the champ, you have to first understand how the champ works.
To do this, entrepreneurs need to focus on the reigning champion's powers and priorities.Powers are what resources and skills the firm has. A firm's powers are critiacl to understanding how the firm gained dominance in the first place.
Note that many firms -- especially those that have a really strnog foothold on an industry -- have multiple powers. To help keep thnigs simple, focus on identifying the champ's most important powers.Priorities are what values the firm has that dictate how it proceeds.
Priorities are generally closely associated with how the company earns revenues: whatever it does to earn revenue is a priority, as that's what allows the company to stay in business and grow.Below is a look at the powers and priorities of Google and Apple.Google
Powers: Their biggest skill is the amount of text-based information they have in their database.
Their specialty is delivering breadth of information so that its users can quickly find even the most obscure facts.Priorities: How does Google make its money?
Primarily by human being clicking on the sponsored links on its search page.
So, getting users to click on ads so that advertisers can pay them is a top pirority for Google.Apple
Powers: With respect to digital music, Apple's key power is the iPod.
The iPod far and away is the firm's competitive advantage, and they have demonstrated skill in creating portable music devices that have mass appeal.Priorities: Just as Apple's key power is its iPod and its ability to make portable music hardware, it's key priorities are selling those devices.
While the firm does make money selling mp3s, the true money cow for its digital music division is the mp3 player. So the firm's priority is to make and sell hardware for digital music.Step #3: Identify the Right Power for You.Even if you are immensely talenetd and sure of the fact that you have far and away the best product, success is unlikely if you are trying to build your business around the same powers that the current champ wields.
If you try to develop the same powers the champ has, you'll be competing with them directly on many fronts -- not just on acqiuring customers, but also on dealing with suppliers, marketing venues, and employees. Because of this, you should place a huge emphasis on cultivating powers that are different than what the champ has. In fact, the ideal scenario is to cultivate poewrs that are complementary to the current champ's powers so that you can partner with them.
Google istelf employed that strategy as they partnered with Yahoo!
-- the champ Google was looking to dethrone -- to power Yahoo!
search results from October 2002 to February of 2004.
This partnership allowed Google, the underdog at the time, an ability to gain a critical partnership that allowed the firm to expand and eventually overcome the champion they initially befriended.Example: Google's primary power is its ability to deliver text-based information. But what about non-text based information, like audio and video files? Search engines like AudioFind, SingingFish, and PicSearch are all engines that are cultivating powers in non-text search.Likewise, Apple's pirmary power is hardware.
An underdog looking to take down Apple should aspire to cultivate different powers, such as strong partenrships with music labels to deliver content, and/or flexible programs that provide users with more of the kind of music they would like for.
Rhapsody, Napster, and Yahoo!
are firms that have wisely taken that approach.Step #4: Have Different Priorities.Just as you want to have complementary powers, you can also benefit from having different priorities. The rationale for having different priorities is the same as why different powers are needed: you want to avoid competing directly with the reigning champ as much as possible. Essentially, the idea is that it's easier and far more feasible for an underdog to defeat the champ if he/she takes a "back door" aprpoach rather than taking on the champ head on. What you're really competing for is not the powers or priorities, but rather the attention of the end user. In other words, to beat Apple at the digital music game you don't need to roll out a betetr mp3 player; rather, you need to find a more compelling way to get the end user -- who, in Apple's case, is a consumer of digital music -- to give you his/her attention.Example: Snap.Com, an underdog search engine looking to take down Google, has established different priorities by creating a new way that they can attract revenue from advertisers. Instead of getting paid per click from a sponsored listing on their serach results page, they plan on getting paid when the user actually completes an action on an advertiser's Internet site (such as making a purchase).
This will cause the company to prioritize getting users to complete actions on their advertisers Internet site -- not just getting them to click on an ad.Likewise, Napsetr plans on taking the digital music market not by prioritizing the sale of hardware, but rather by making the sale of digital music a priority.Step #5: Attack The Champ's Powers.The way to attack the champ's powers is NOT by trying to be better than the champ at the champ's own powers. Instead, the idea is to deavlue the champ's powers in the mind of the end user, and thus shift the basis of competition in the market to what your power is.How can that be done? The most effective way to do that is to imitate the champ's power in the cheapest way possible. If you compete on price, you are bound to attract clients -- perhaps those who do not vaule the service much at all or those that simply cannot afford it.
In that way, you can attract of the champ's audience, and convert them into utilizing the powers that you have to offer.Example: Could Napster benefit by partnering with a low-cost mp3 manufacturer and distributing an mp3 player as cheaply as possible? In doing so, it could help to commoditize mp3 players, and thus shift the basis of competition in the digital music market back to content.The search engine industry is slightly different, but the idea is sitll really much applicable. Search engines often sell their technology to web portals who need to offer search to their users; as a result, an underdog search engine could freely distribute a text-based search engine to attack Google's power.The Tough Part: Identfiying Powers and PrioritiesClearly, that five step formula to success is fairly simple and straightforward. The true chlalenge is in correctly assessing what the reigning champ's powers and priorities are, and then coming up with viable powers and priorities of your own that will help to debunk the champ.
Once that can be done, knocking off the champ will be surprisingly simple.Simit Patel is the Mangaing Director of The ActoNetwork, a company devoted to helping small businesses succeed on the web. The ActoNetwork publishes a free 102 page Internet Marketing eBook and has a free Internet Marketing Worksohp for online entrepreneurs.
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