StartUp Founders: Find An Area Of Your Market With The Least Resistance / Create A Micro-Monopoly
Your solution may be better - but if you’re entering into a competitive space, see if you can find a tiny sliver where there is less competition and higher chance of market penetration. Own that space then scale.
The concept of creating a micro-monopoly as a startup strategy isn’t as commonly discussed as it should be. When founding a startup, it’s natural to look at the market and start sizing up your competition. You might find yourself facing well-established industry giants, armed with more resources, better market penetration, and a capability to outshine you at every turn. Even with a superior solution, the struggle against such adversaries can often seem insurmountable. However, there is a less beaten path that could potentially yield greater returns, and that is the concept of a micro-monopoly.
A micro-monopoly suggests focusing your energies on a specific segment, vertical, industry, or geographic region where competition is less fierce, allowing you a greater chance to shine. It may not be the sexiest or most lucrative part of the market, and it might even stray slightly from your product’s sweet spot. Still, the potential benefits in terms of acquiring customers, generating revenue, and establishing your value in a space with less competition far outweigh the drawbacks.
Even in the tech industry, where competition is fierce and the market is dominated by big names like Workday, SAP, Oracle, and Salesforce, a micro-monopoly can provide a pathway to success. As Reid Hoffman, co-founder of LinkedIn, once mentioned, “Starting a company is like throwing yourself off the cliff and assembling an airplane on the way down.” But finding your micro-monopoly is akin to finding a less steep, less treacherous cliff where you have a better shot at assembling that airplane.
By creating a mini-monopoly within a smaller market, you can leverage this success to secure funding, enhance your understanding of the market, and fine-tune your product. From this position of strength, you can then scale up and potentially break into larger markets, where you would be competing with more established players.
So, if you’re a startup founder, don’t get disheartened by the intimidating presence of the industry giants. Look instead for a niche where you can build your micro-monopoly. It’s easier to persuade customers to choose your product when you’re the best option available in a specific area, even if it’s smaller, rather than being one of many options in a larger arena. Seek out your micro-monopoly and run headfirst into it.