I bought this reasonably cool pair of board shorts for surfing this summer.
They cost me a whopping $80. Which is what I call ‘insult pricing’. It’s a pretty simple equation actually. The key players in the surfwear industry (Billabong, Quiksilver and Ripcurl) charge these prices because they can. They don’t have any ‘credible competitors’ in this board short subsegment of clothing.
In recent years surf brands have been hit by many competitors in other areas of the market which they used to ‘own’. Especially in t-shirts, from the myriad of streetwear companies, to the uber cool on-line players like Neighborhoodies and Threadless. Interestingly the shorts in this photo would cost >$5 to make. There is significant margin in the product. Such high margins often begets competitive entry into the market place.
The arrogance of said surf brands has invented an opportunity for a nimble entrepreneur to steal part of this market. And the way to do it is exactly the way Threadless have. Go online and build a community to design the uber cool boardshorts / shorts and sell them globally at a fair price. In fact, surf wear is so clichéd and over branded these days that I avoid wearing it. Most of the designs are very rank and have really lost their edge. I only use surf brands for surf equipment. The only reason I bought the pair in the photo is ‘lack of options’.
If anyone knows some one already doing it – let me know
If anyone wants to do it – let me know as well. I think it’s worth ‘investing in’.
Competition is eternally existential. We compete for love, money, attention, fame, wealth, recognition, and sometimes, we even compete for food. Turns out humans aren’t the only species who must to compete to survive. All living things must do it. Even trees in a deep forest compete for sunlight by growing as quickly as possible forgoing width for height.
What I find most interesting about competition is how we or any being chooses to do it. When a competitor catches us unaware, they usually achieve this through using some form of subterfuge. Like growing in a smaller segment of the market. Focusing on a neglected geography. And the really smart competitors disguise what they are doing so you don’t even see them coming. A little like Google has done to Microsoft who was overly focused on the ‘desktop’, while the world was moving to web app’s and gathering and storing of information externally.
I noticed this phenomenon first hand recently. My business was moving along swimmingly (which in this case is my tomato plantation). As you can see from the photo below. My Roma’s looked healthy and almost ready for the picking:
But upon closer inspection a competitor had been eating away at my market for quite a long time without me noticing. Once I turned around the tomato to inspect the back side of them – I was devastated to find my competition. They caught me napping and had a very big impact on my market share. As can be seen here:
How did they manage this?
- The caterpillar was smart enough to attack on the reverse side out of view.
- His color is exactly the same as the tomato proving an excellent camouflage.
- He waited till the market was already developed (by me) and the tomatoes had a reasonable size and were worth attacking – in this case risking his life over!
- In true terrorist fashion he penetrated the market at one entry point and ate it inside out. That is, the caterpillar was so deep inside the market, he was completely out of view.
None of this was by mistake. It has been driven by millennia of evolutionary survival and subsequent genetic coding. Nature is smart.
The implications for startups are many. When we start out to compete, the best thing we can do is replicate what nature does. Stay out of harms way. Stay small and unseen. Try and gain some momentum and size. If we’re lucky will have built our share of the market and be ensconced before anyone notices.
(FYI – I picked the tomatoes, and placed them in another location of the garden to let the caterpillars fight another day – they may just leave some seeds which will flourish next season!)
My problem is…. I’m a really nice guy. Really, I’m reasonably nice, just ask anyone who knows me….
Actually it’s more I’m not as smart as I’d like to think I am. You see, often I don’t do people any favours by trying at all costs to be, Mr Nice Guy. Even if it’s at the expense of helping them grow. The interesting thing is that I usually get what I give, and that is, people are generally very nice to me. Even if what I need on occassions, is some home truths to help me grow.
What I really need is tough love.
Turns out my team also need some tough love too.
Tough Love – Startup blog definition:
Having a team let each other know ‘in no uncertain terms’ when members are goofing off, at the expense of agreed upon and shared objectives.
It doesn’t mean we turn into nightmare colleagues or the boss we always hated.
It means that we have a culture where we don’t want to let each other down, but we pull each other up in tough times and provide mutual motivation. We give each other guidance when we need it.
Photo by Chuck Rogers
Words by Steve – rentoid.com
From a competitive viewpoint, imagine for a moment that our worst business nightmare came true.
Maybe Google decides to enter our market space. Or the Coca Cola Company launched a beverage with the same consumer benefit we’ve been bootstrapping. Or large company X decided to compete against “us” head on.
Well – you’d be surprised how that feels. How it makes us react, and how it very quickly changes our perspective on what is the most important element in ‘winning’. In competing effectively for our share of wallet.
All of a sudden many of the projects we are investing our time on seem far less important than they were yesterday. Maybe that front page redesign can wait, maybe the shiny new web 2.0 buttons are a little less important. Maybe our packaging will do for now and quite possibly every project we have on the agenda, excluding customer ‘centric projects’ can be put on hold.
Here’s an exercise worth doing with your team. Act as if. Act as if it has just happened. Have an ‘emergency session’ with your team on how you’d react if a more well resourced, financed and well known competitor came to play. Build your battle plan. Once your battle plan is drawn up – throw out your current business plan and work on that instead. Because they are coming, especially if your startup is in a fertile consumer territory.
After the intital fear, most entrepreneurs just get inspired, get angry and get on with it. A good scare never hurt anyone.
Steve – founder rentoid.com
I took this quote from Seth Godins latest micro book Tribes:
“Do you beleive in what you do? Every day? It turns out that belief happens to be a brilliant strategy”
This resonates with me because it will motivate us to find solutions that ‘non believers’ will be too inept, apathetic or bored to uncover.
Entrepreneurs ought launch something they beleive in conceptually, not just financially.
In order to be in love we need to feel loved. Often we mistake love for other intense emotions such as lust, obsession and even fear.
So if we were to translate this to business parlance it might read like this:
If we want people to love our brand or company, we simply have to make our audience ‘feel loved’.
So then the next questions we should be asking are:
– Will they love this product?
– Will they love our value equation?
– Will they love our guarantee?
– Will they love our designs?
– Will love our ‘contact us’ policy or phone staff?
In fact, let’s just start every audience related question with the words ‘Will they love….”
If we do this and focus on being more than good, more than liked and only accept moving towards stuff people will love. Then one day, they may just love our brand.
Below is an elevator pitch ‘workshop’ I gave for the ‘Agents of change‘ entrepreneurs club of Melbourne University. The video below is the one of 6 x 10 minute videos. The first (the one below) includes an ‘example’ pitch I did for rentoid – then has ‘alot’ of questions and answers. The last of the videos, workshop 6 – all of which are here has some ideas on great pitcing practice.
It’s kind of long, but the largely due to the discussion afterwards!