Competition? We HAVE NO COMPETITION.

January 19, 2010 – 11:53 am

The book Blue Ocean Strategy should be on the desk and in the mind of every entrepreneur and startup investor.

The concept is not new…

You’re better off as a “small fish” in a wide, blue ocean than in a pool of water bloodied by the fighting of competitors.

Attacking a strong enemy with a frontal assault is typically a recipe for disaster.  Instead, find his weaknesses (flank) and stay in position to exploit them ferociously.

Offer unique value to customers.

Execution is critical….

Learn how to “map” the competencies of your competition and YOURSELF.  This is critical.  You simply have to commit to being excellent in new and different ways.

When we started mytrade, we started with this concept in mind.

  1. What are 10 things people love in a finance site?
  2. Map Yahoo finance (the dominator) in each category.
  3. Identify the categories that Yahoo Finance was excellent at (data, quotes, news, screener, etc)
  4. Completely IGNORE those categories (mytrade has NEVER been about data, quotes, news or a screener)
  5. Identify the categories that Yahoo Finance was poor at (peer-to-peer communication, unique trading ideas, options spreads, etc)
  6. Make mytrade ALL ABOUT those things that Yahoo was poor at…that we thought people would like

Google did the opposite, tried to take on Yahoo Finance directly.   And while Google Finance languishes (despite its incredible “exposure” positioning), mytrade thrives.

Competitors irrelevant….

When you do this, the “competition” isn’t competition anymore.   They can’t fight you because they don’t understand or care about your core competencies.   If anything, they’ll want to partner with you (or buy you) to fill in a hole that you’ve proven they have.

It’s all about YOUR execution of YOUR competencies.  No one else is involved.

You have to be right that people will care about the categories you’ve identified….

This isn’t a process to be taken lightly.  It will define your business.  It will define your customer-base.   Take your time and get it right.  Ask questions.  Challenge yourself and your assumptions.

The BEST thing that can happen to you in this process is to discover that customers care a lot about something you and your competitors haven’t even thought of yet.

Do it right, and you’ll answer everyone with “we have no competition”….and mean it.

Win.

  • Blue Ocean Strategy absolutely is one of the best business books of the past decade. In order to compete in blue oceans, not red oceans, it's absolutely critical to be able to draw one of those industry strategy canvas maps -- if there's only one chapter in the book to read, it's the one that shows you how to graph all the capabilities of market leaders and then adjust them to carve out a Blue Ocean for your company. Fantastic examples from Cirque Du Soleil, the Australian wine industry, and (I think) Southwest Airlines. It's not a matter of doing some things incrementally better than the market leader, it's doing some things crazy-good that nobody else is doing, and then deciding which areas to downplay.
  • Interesting commentary.

    -- The Remora.
  • Hi Andy, while I haven't read BOS, I really like what your saying here. It's a bit like the negative spaces sometimes used by those clever logos.

    So you take your main competitor's strengths and make a stencil out of them. You then spray paint over the stencil and remove it. What's left is your product map. I like it, I really do.
  • Andy, great post! I read Blue Ocean when it first came out. I'm now re-reading it again. I'm creating a new company and using the 'competition irrelevant' heavily. Again great post and thanks for the reminder!
  • Interesting post, and smart approach you took with MyTrade.
  • I was dissappointed by Blue Ocean. I expected a strategy but got a bunch of references to the silver bullet of "value innovation".

    "You have to be right that people will care about the categories you’ve identified…"
    Right on. Get that wrong and you're finished before you begin.
  • I can see how the book might resonate with Andy and seem fairly useless to you (or me, for that matter.). Andy may be fleshing in the gaps in the book's generalities with concrete examples from his experience building successful start-ups, and seeing how what the book says is consistent with what he did; aspiring entrepreneurs such as you or me might be disappointed by the lack of detail, hoping for more of a specific road map.

    Some stuff is just not laid out for you though.
  • Yeah, good point Dave. There were some great suggestions, and I did love the history of successful periods of businesses that impressed historic brand power on future generations (Ford motor, Hughes Aircraft).
  • I haven't read the book, but I'll take a look at it in Barnes & Noble next time I go. Let me edit my previous comment, which was poorly written enough to make it seem as if I had read the book.

    Whoops, can't edit it. Must be a time limit on that. I should have started the first sentence like this, "I can see how a book like that...".
  • Our approach to mytrade was designed SPECIFICALLY from what was learned in
    the book.
  • Andy, btw, looks like that site I mentioned (the one that could have a side effect of increasing options volume) is going to go live this week. I'll e-mail you a link when it does.
  • OK, that puts it in a new light then.
  • Focusing on features that competition ignored, but that customers value is a pretty sexy approach.

    Admittedly, I expected a little too much from Blue Ocean.
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