We live in an age of great innovation spurred by amazing advances in information technology, the internet, and social media. These changes are inspiring a constant stream of new business ideas. However, many of these will be snuffed out in their prime. The reason? Clumsy thinking around market timing expressed as: “It’s been done before”, or “you’re too late, someone’s already thought of it.”
The tragedy is that market timing is rarely the issue nor the impediment it’s made out to be. The solution in most cases is to ignore the timing question and instead aim for an answer to: “What’s your point of difference?”
I’ve had a personal experience in this. When I was in my mid-twenties, I had a promising business idea to produce cladding for multi-story buildings in Australia under licence to a Norwegian company. The product was unavailable locally. But I was young, and I sought advice from a person with much more experience in the industry. He said, “there are a lot of makers of cladding out there.” Despite a strong point of difference – it was made from innovative materials – I listened and dropped the idea. A few years later the same person shared this with me. “You’d have made a lot of money if you’d gone ahead with that idea.”
Misguided advice like this and subsequent project abandonment represents a considerable loss at the personal, business, industry, and national levels.
Focusing on Point of Difference
Let’s look at another example. Tony Nash is the CEO of an online business success story. Booktopia sells books and is a competitor to Amazon. Today it’s a healthy, profitable company with nearly 300 staff and sales in the millions of dollars. It rose from humble beginnings about 15 years ago. Like many start-ups, it was greeted with the all-too-familiar market timing pronouncement. As Tony put it, “We were told that we started too late in online book selling.”
But he was not deflected by comments like this, instead he pressed on looking for a point of difference at every turn. The first of these concerned product range. This became the thin edge of the wedge for future success.
At this stage of the market’s development, the bricks-and-mortar booksellers were resistant to carrying some emerging genres. The traditional booksellers could see these categories were popular, but they didn’t want to stock them either because they didn’t think they were “good books” or because they had a distaste for fan-based genres. One example was Manga graphic novels – a niche category that’s not to everyone’s taste, and not being stocked by most booksellers, but one with a loyal and growing audience.
The failure of existing booksellers to fill the product-range gap provided Tony and his team with just the opening they were seeking. As a start-up eager for any sales whatsoever they had no qualms about pouncing on each and every opportunity.
Booktopia clawed its way into the market, and then provided better service online. At the time, the bookshops were developing an online sales presence through their websites. But their moves were tentative at best. They were hampered by their legacy businesses, a lack of technological nous and their conservative attitudes to certain book categories. In addition, the nation’s largest retail bookseller was hampered in moving with the times because it operated through a complex and cumbersome arrangement with its franchisees. In Tony Nash’s view this company should have occupied the market space that Booktopia now does, but Tony played his advantage.
Having established product range as a starting point of difference, Booktopia dug in, expanding its range to other genres with sales potential. It took on more conventional books and added the supply of books to the nation’s universities and colleges as well to large corporate accounts.
Tony sums up the company’s journey this way. “What we’ve done over the years is to constantly look for a point of difference. This is not just any point of difference but one that customers value – and that’s an important distinction. They want a suitable product range, and we monitor that closely. They want speedy delivery, we’re great at that. They want to know how far away their order is, and we have the best order tracking in the business. They want to be able to talk to someone locally and not get the run-around, and we’ve spent a lot of money on our local call centre.”
Booktopia has come out ahead by outdoing the competition on value calculated by weighing up the strategic factors relevant to customers – brand, delivery speed, order accuracy, customer service, product range, and delivered book price.
Cast Aside the Market Timing Myth
I recently sat with a client called Jane who wanted to discuss her new business idea. She had a couple of decades in business-to-business sales experience and found herself out of work through Covid. Her start-up idea was sales training and coaching. If you’re like me, your visceral reaction is something like “there’s a lot of competition out there.” Jane had heard this from many sources.
However, rather than dismiss the idea as a stupid folly we set to work focusing on what her point of difference might be. And, over a couple of hours and a few cups of coffee, a real and distinctive point of departure did emerge which included focusing on women business owners.
You can be quite certain that the founders of Google, Larry Page and Sergey Brin, received the “it’s-been-done-before” message along their business’s journey. The Google search tool was preceded by many others including Yahoo!, Magellan, Lycos, Infoseek, and Excite. But Page and Brin pressed on confident that they had a point of difference which mattered to customers. Google has succeeded when previous search engines haven’t because its internet tool has performed better in ways important to customers – such as speed, relevance and accuracy.
Whether you’re a start-up entrepreneur or a director of a large multinational, you need to be wary of the market timing myth. It’s destructive to personal morale and crippling to organizational culture. It can also be expensive in terms of missed opportunities. A single throwaway line like “it’s been done before” can dampen initiative and burn out innovation.
No matter what your business idea, the golden rule of business success will always apply – outperform the competition on the strategic factors that matter to customers and you’ll succeed.
Author – Graham Kenny
Regular author in the Harvard Business Review
Graham Kenny, CEO of Strategic Factors, is a recognized expert in strategy and performance measurement who helps managers, executives, and boards create successful organizations in the private, public, and not-for-profit sectors. He has been a professor of management in universities in the U.S., and Canada. You can connect to or follow him on LinkedIn.