I have a niche hobby. I keep saltwater marine aquariums and although keeping fish is a pretty big, high dollar industry, marine aquariums is a very small slice of that hobby. I'm friends with my local saltwater fish store specialist in the Chicago area. I was in his store a couple weeks ago and he had bought a bottle of Johnnie Walker Blue to celebrate. His largest and only remaining competitor in his area of Chicago was out of business. He was very happy. I shook his hand but I gave him a little warning, competition can be good for everyone, even you.
Some may think that's a strange concept. You may be hyper competitive and highly bent on "destroying your competition". But a market with no competitors is probably a very small and poor market to be in. I have been involved in several startups in "nascent industries" or "nascent technologies". Nascent is just a fancy way of saying there is no market yet but hold onto your hats there sure will be. Of course the next thing to do is talk about how big the potential new market is going to be and how you will be the leader at the forefront. I worked at a tech startup for years in which every dollar we brought in the door expanded "the market" by 90 cents on the dollar. In other words their was little to no competition. And there was little competition for a very good reason, the nascent market just wasn't being realized. If a market is developed and growing then competition is going to jump in.
For my friend with the fish store his small industry is suffering from a poor economy. The hobby comes from discrentionary income. As budgets get tight people get out of the hobby. They call it "getting out". In fact his success over the competition hasn't yielded any overall gains in sales overall. In other words his industry is shrinking and his business is just not safe.
When you have that big idea and all you smell is opportunity you naturally start looking around. Is anyone doing what I'm doing and how I'm doing it? If you don't find anyone in space or hardly any competiton most people get excited. I've learned to get concerned. If "it" hasn't been invented or someone isn't using a technology, product or service in an area you're eyeing there could be a VERY GOOD reason why.
- Others tried and failed already (maybe many of them)
- Your market is very expensive to break into
- Your market is so small it's ignored
- Your market isn't ready (too expensive, doesn't fit processes, etc.)
- Getting attention is just too hard to break through
There could be many more but the above ones are the ones I've faced. So what should you do about lack of competition. Talk to everyone you can in that space and look past your isolated market. Talk to vendors in the supply chain, talk to all sorts of persons in the businesses you want to sell to, call up industry analysts and even industry reporters (there is almost always industry focused magazines, etc.) and call the associations for the industry, the chamber of commerce, etc. You need to meet people when you can and you need to piece it all together.
Ask them will the industry spend money on your product or service. You need to ask it three different ways to the same person. The answer is critical. If the answer from most is yes then you might have just done the right amount of homework. Of course I'm hoping you'll also say to those same people, "can I call you back when I'm actually in the market". After all you might have done a lot of your business development work up front.
Actions to Take
- Create your industry contact list.
- Put all the companies first that would be potential clients and then list all the other companies related to that market.
- Create your five basic questions to ask and make sure you get them answered with each conversation.
- Make a contact person list with each company.
- Set your timeline to get the feedback.
- Go to work and keep a score card.