Recently I drove by a closed restaurant. It had been a steakhouse most recently. I thought about how tough it would be to compete against the other steak houses in the area and wondered if that was why it did not survive. As I drove on, I thought about all the types of food available today at restaurants from German to Italian, to Mexican to Chinese to Thai, to bagel shops, well, you get the picture.
I realized the one thing harder than competing against the steakhouse or any other type of restaurant probably would be if a new restaurant came along with a whole new type of food or way of doing business. At least if you are a steakhouse, the customers will know what to expect. This is the paradox of a new idea. While many customers will say that they are seeking something new, they tend to gravitate to the familiar.
If you are starting a business that is truly a new idea, how do you get customers to try you out? Groupon leveraged the analogy of a coupon, something everyone already understood. When Yahoo became be one of the first mainstream search engines, they spent a lot of money on memorable ads that demonstrated what a search engine was, then added a unforgetable holler of “Yahoo!”
How does the small business or startup entrepreneur best compete with a new idea? After all, they do not have the millions of dollars Yahoo. That is one of the most challenging questions for the truly new idea based business. Here are a few paths to consider:
- Like Groupon, create an analogy to a recognizable product idea
- Offer it as a complimentary product to an existing well-known product. Want to sell an “after desert palate cleanser”? Sell it with desert.
- Offer a known product at a very low price then bundle the new idea product on top. Are you going to steam clean office desks to get rid germs? Better sell it with the rest of the cleaning process.
Offering a brand new, unrecognizable product to a market that does not know what it is, will most likely lead to failure. Make sure your new idea can be recognized and understood in context to it’s use.