I recently started to collect voicemail messages from my audience so that I could share their questions (and my answers) right in the middle of a podcast session. The voicemail transcribed below from SPI Fan Tony P., however, is one that deserves its own blog post:
“Hey Pat, thanks in advance if you can help me out. I'm feeling pretty bummed right now. Six months ago I had a great idea for an online business and I was really amped about it. I got the “entrepreneurial bug,” as you say a lot during your show. I was so excited until I did some more research and saw that there were already 4 or 5 other businesses doing exactly what I wanted to do, so I tried to think of something else instead. I haven't thought of anything good yet, but that's not why I'm bummed. I'm bummed because I opened my email today and saw a Google Alert with a link to a brand new company that recently launched that is doing exactly what I wanted to do 6 months ago! They seem to already have a number of users and are positioned to do really well.
I don't even know why I'm calling you. I think I just needed to tell someone who could understand. I'm sorry for the rant. I just feel like if I acted 6 months ago I could have something up and running already, but then again there were already businesses in the space that I wanted to get into…but these guys did it. I'm guessing they had a lot of money to begin with, which I don't have. How can I compete with other businesses when I'm bootstrapping from the start? Should I just find a niche or business that doesn't have any competition instead? Thanks again for hearing me out Pat. I love the show.”
Thanks for the voicemail Tony! Now, let's dive right in.
An Idea Stopper
I've spoken to a lot of people who are interested in starting an online business, and almost everyone goes through the same two-step cycle:
- An idea, followed by feelings of incredible excitement, hope, planning, mindmaps, wireframes and “what if this works!”; then…
- An external element comes into play, before the business is even started, followed by feelings of incredible doubt, apprehension, fear and “what if this doesn't work!”
At this point, some people persevere, while others move on to something else.
That “external element,” also known as an “idea stopper” can come in many forms:
- The realization that the project is going to take a lot more work than expected.
- Not knowing exactly where to start.
- Skepticism by friends and family.
- A “change in weather.”
I put “a change in weather” in there, not because the weather actually has an affect on how we follow through, but because a lot of times it just seems like people are looking for any ol' excuse not to move forward and succeed. In Why Some Entrepreneurs Undermine Their Own Success, the writer points out that many entrepreneurs, consciously or subconsciously, feel that success will lead to loneliness or envy, or that it'll change their lifestyle or be too expensive—or that they just straight up don't feel like they deserve it.
Competition, on the other hand, can be seen. A quick search in Google and you're likely to find other businesses who are already in the same space that you'd like to get into.
Competition is a good thing—you've heard me say this before. Coming in later in the game is an advantage because you can see what existing businesses are doing right and what they're doing wrong. You can be a consumer before you become a company, and can better understand the experience that customers currently have, and what options are available to them in today's market. You have the ability to come in and reshape that customer experience in whatever way you'd like.
When SmartPassiveIncome.com was born, I came into it knowing that the make money online niche was extremely competitive, and there were definitely more than 4 or 5 existing websites out there talking about a similar topic—there were thousands. Probably tens of thousands.
What helped SPI was a number of different strategies, but it really comes down to two things:
- Seeing what everyone else is doing and purposely doing something different. This is where generating my income reports, expanding into a Podcast, and just being completely honest and transparent comes into play, among other things like not selling directly to my email list. These were conscious decisions that I made because of what everyone else in this space was doing.
- Taking advantage of my unfair advantages.
Types of Unfair Advantages
I was first introduced to the term unfair advantage, in the context of online business and blogging, by Lain Ehmann who was the featured guest on SPI Podcast Session #37: How to Monetize a Hobby Niche. To date, her episode is one of the most popular success stories on the podcast because Lain shares exactly how she's now earning 6-figures a year in the scrapbooking niche.
She described an unfair advantage as a skill or asset that you have that no one else has, or very few others might have in a specific niche. It's your competitive edge, and whatever that edge may be, it's your job to use it to your advantage as much as possible as you shape and create your business.
This is different from a Unique Selling Proposition, or USP.
As Corbett Barr from Think Traffic says:
I like to think of your overall USP as your reason for being. Think about it from your customer’s point of view. With tens or hundreds of potential options out there, you have to answer the question, “why should I buy from you?” Or, “why should I read your blog, when there are millions of other blogs I could be reading?”
You definitely need a USP, but a USP is not your unfair advantage. It's how your business will stand out of the crowd, but a USP is not the skills or assets that can help you get there.
You can't sell your skills, but you can and should absolutely use them to build and shape your business or blog.
To understand more about unfair advantages, I've listed 7 different types below, some of which you may already have within the market you're in or looking to get into. If you find one or more that matches you, use it to your advantage.
Let's start with the one Lain shared about how she got started…
1. Your Rolodex—The People You Know
You know and have access to the right people in your industry, people who others do not have access to. You're a connector, and you can provide value to a specific audience by using the connections you've made over time.
Lain's experience freelance writing for scrapbooking magazines put her in contact with some of the top people in the industry. She later started an online event called True Scrap that brings all of these people together to teach live classes, and thousands of people have attended and benefited from her ability to connect with the right people.
Who do you know that others in your industry might not?
2. Your Experience—What You've Been Through
Last year, I watched an episode of Shark Tank where I was introduced to Major Robert Dyer. Major Dyer was pitching a new energy drink called The Ruck Pack Energy Drink. It's not like the world needs another energy drink, but he was able to convince both Kevin O'Leary and Robert Herjevic, two of the investors on the show, to give him $150k in exchange for 20% of the company.
Major Dyer used his experience in the Army to create an energy drink that was perfect for a combating soldier. He was actually in Afghanistan when he came up with the concoction.
His experience became his advantage because he was in extreme conditions that allowed him to create and test a drink of this kind of caliber, one that provided this kind of energy and focus that a combating soldier needed. I doubt the guys at Red Bull or Monster put themselves in the line of fire when testing the capability of their drinks.
When I started SmartPassiveIncome.com, I already had experience with a successful, automated online business at Green Exam Academy. A lot of people were providing online business advice at the time, but most were using other people's businesses as examples, or just spoke theory with no real case studies to back it up. Here, I was able to use my own experience as evidence, and it helped me become more credible right from the start.
What experiences in your life have given you the ability to prove yourself or your business more than others?
3. Your Story—And How You Tell it
Stories are incredible marketing tools. They stick. People who listen to or read stories transport themselves into the situations that are described and the storyteller is better able to make a deeper connection with his or her audience.
We all have a story to tell. If you have a good one, tell it and use it to your advantage.
I know I have a great story. I've shared it here on the blog and I even went deeper into the story for my first book, Let Go. [Click to buy on Amazon. Full disclosure: I receive affiliate revenue if you purchase through this link.]
It's funny because when I'm interviewed for podcasts and radio shows, many times the interviewer will apologize and say, “I'm sorry…I know you've probably told your story hundreds of times before, but I'd like you to tell it again if you don't mind.”
I always respond with “Of course!”
I love telling my story, not just because it reminds me of where I came from which always gives me a motivational boost, but because I know it's a great way to connect with an audience. To have the opportunity to share it right from the start is awesome.
Of course, your stories should always be true, but if you have a good one make sure there's a way for people to hear it.
What's your story and how can it help your business?
4. Your Hustle—How Much You Put In and Where
Gary Vaynerchuk, author of one of my favorite books, Crush It, would probably agree with me when I say that sometimes all you need to do is hustle. I mean like, truly hustle. The all-out just insane amounts of work kind of hustle. [Click to buy on Amazon. Full Disclosure: As an affiliate, I receive compensation if you purchase through this link.]
Not everyone has the time or ability to hustle, and of course the work that's done has to be the right kind of work – the right kind of hustle.
John Lee Dumas, host of a ‘new' podcast called Entrepreneur On Fire, is a perfect example of someone who is using his ability to hustle to his advantage.
John has a daily (yes, daily) podcast where he features an interview with a successful entrepreneur. He just started his show this past October, and he's already up to episode 177. That's nearly 3 times as many shows that I have!
Now, John enjoys over 200,000 downloads per month, he's written a book, has products and has opened up a ton of opportunities for sponsorships and partnerships that wouldn't have come otherwise. He's not the first person to have a show dedicated to interviewing rock star entrepreneurs—not even close—but he's definitely the fastest to see these kinds of results.
He's not just working hard either, he's working smart. Hustle doesn't mean just pure physical and mental work, it can mean spending the time to put the right systems into place to generate more output.
What's something successful that other businesses are doing that could use your hustle to stand out?
5. Your Personality & Your Ability to Connect to Others
Out of the 7 billion people in this world, you are uniquely you. Within specific markets and niches, you are definitely uniquely you. If you have a personality that people can easily connect with you shouldn't be afraid to share it.
In 2009 when struggling to get traffic to this blog, I had a chat with Jeremy Frandsen from Internet Business Mastery. He told me I had a magnetic personality and I should find other ways to share it. That's when I started my YouTube Channel, and then later, my podcast, which just passed 2,000,000 views and 3,000,000 downloads, respectively.
Similarly, in some niches, injecting any kind of personality into your business is an advantage. This is especially true when it takes more than 7 seconds to find a person's name on your competitors' websites.
For example, when I started GreenExamAcademy.com to teach people how to pass the LEED Exam (a specialized exam in the architecture industry), I was the only person in the industry teaching about this exam that people could call by name. Every comment and email would start with: “Hey Pat…”
Right on the front page (even today) you can see my picture along with my name and a little description of who I am.
When the United States Green Building Council (USGBC), the organization that actually administers the LEED Exam eventually came out with their own sets of study material, I thought my business was doomed. How could I compete with the actual organization that writes the test questions and grades the exams?
Well, to my surprise, when the USGBC launched their study material, my sales went up—significantly.
Since they had a lot of overhead and several people to pay, the price of their material was pretty steep. When people wanted to see what else was available and compare prices, after searching in Google or asking around, my name always came up. In the end, people were more comfortable purchasing from me because they knew exactly who they were purchasing from, and they were happy to receive advice from Pat, a real person who took the same exam these people were studying for, as opposed to a larger, faceless and less personal organization. No offense to the USGBC, of course. They are an amazing organization, but that's exactly what they are, an organization. Even though I had a business too, people were happy to deal with Pat.
6. Your Ability to Listen, Build, Measure and Learn
All companies build something, but not all of them measure, learn and then adapt or shift.
I've recently been listening to The Lean Startup by Eric Reis, which is a fantastic book about how today's entrepreneurs and startup companies are approaching the way they create and innovate. In it, the author talks about how vital it is to use validated learning and scientific experimentation to be able to steer a company in the right direction. In other words, to use customer feedback and quantified data analysis (of real, non-vanity metrics) from a minimum viable product to make decisions and pivot a business one way or another. [Click to buy on Amazon. Full Disclosure: As an affiliate, I receive compensation if you purchase through this link.]
If you have the ability to see what holes lie in existing markets before you enter it, the ability to listen to a target market (or become a customer yourself who is extremely conscious of the overall customer experience), and learn from the wins and failures of the companies that already exist, you will have an edge over your competition.
Like I mentioned earlier, coming in late in the game can be an advantage if you listen, learn and provide solutions for what seems to be missing. Even coming into a market with minimum viable product, you'll have the advantage of being able to get deep into the customer experience to shape your product or service to what it should be, again, all based on what you're able to measure and learn.
There is a lot more to be said about lean startup methods and the build-measure-learn feedback loop. Would love to get Eric Reis on the podcast if possible. 😉
7. Your Specialization—Who You Serve and Your Ability to Do So
It's not just the skills and experiences that you have to offer that can give you a competitive edge, it can also be that fact that you want to serve a more specialized segment of a market.
Generally, the more specialized you get, the less competition you have to deal with. In addition to that, the more specialized you get, the better you can hone in your skills for a particular group of people. Your advantage is your knowledge of and ability to serve that particular segment of the larger market.
Take for example, shoes.
Everyone (well, almost everyone) buys shoes. If you wanted to enter the shoe market, you might think your competitors are retailers like Zappos, EastBay, Sketchers and other large online retailers. Then there's Nike, Reebok too. It's virtually impossible to compete with them, especially when you're bootstrapped. So what can we do?
Instead of getting into the market to sell all types of shoes, how about serving a part of the market that's looking for a specific type of shoe: running shoes, walking shoes, children's shoes, etc.
Even at this level of specialization, however, it's not quite an advantage yet because companies already specialize in these types of shoes: Foot Locker, The Walking Company, and Stride Rite, respectively. Now what?
Within running shoes, how about soccer cleats? Within soccer cleats, how about women's soccer cleats?
When your target market is women who are looking for soccer cleats, it's much easier to do market research and enter the build-measure-learn feedback loop. You have an advantage over others who are targeting a larger segment of the market.
Trunk Club, is a great example of this kind of specialization at work.
Like lots of other businesses, they sell clothes. That in itself is not very special.
But, their target market and who they serve is special, and it's not everyone. Their target market is specifically men who want to dress well who either don't like to go shopping, or don't have the time to do so.
It works like this:
You speak to a personal stylist over the phone, they ask you a number of questions to get to know you a little better and figure out your style, and then they send you a Trunk with a number of pieces of clothing in it based on your conversation.
You try stuff on, keep what you like, and ship back what you don't like in the same trunk. Shipping is already paid for.
Boom. New clothes and I didn't even have to leave my house. No membership fees, you just get a trunk whenever you want, and they charge you for pieces that don't return.
I've received two trunks so far and another is on the way. I've kept roughly 35-40% of what was shipped to me .
I heard about this service from a friend, and I've definitely passed this service onto others. Not everyone, but other men around the same age who are in situations where they might need to dress up and they might be too busy to go shopping on their own.
You see, when you specialize and can provide value to a specific segment of a market, those people within that market tend to talk to each other about you.
How can you specialize and become the topic of conversation when those people get together?
What About Content?
Remember that skills like writing, video production, speaking, creating products—stuff you create that your audience consumes directly—these can all be unfair advantages too. If you write better, create better videos or have better podcasts and products than your competitors, then of course, those are definitely skills you should be taking advantage of—but that's almost a given.
The reason I bring this up is because when you're first starting out, it can be deflating to write because your writing isn't the best. It's deflating to create videos that don't look as good and it's deflating to take forever to record your first podcast session or struggle with your first product. That was me. When I first started, I always felt deflating and what I was producing wasn't where I wanted it to be. Everyone else was already a step ahead.
Over time, these skills started to improve and what was once a burden became my advantage. This is why I'm big on using multimedia in your brand and Being Everywhere, because not everyone is doing it.
So, to Tony who left that original message at the top of this post, my summarized answer to you would be this:
Just because there are competitors doesn't mean you should try to find something else. Not yet. Even now, it's not necessarily too late. Existing competitors tell you that there's a market for your idea already and you can investigate to see how consumers react to what is already being offered, both positively and negatively, to shape and inspire your own approach. How can you compete? Money isn't the answer. Although it can help, having loads of it isn't necessary. The real answer to being able to compete is to showcase and utilize whatever you have to offer that none of the other businesses can. In other words, your unfair advantage. What is it? Figure it out, milk it, and then make something happen.
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Cheers, and my prayers to everyone around the Boston area and everyone affected by the recent tragic events that happened. Be safe.