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Be First or Be Better When Starting Your Business

by Ron Kurtus (19 September 2015)

When starting up a business, you should either be first or be better as compared with your competitors.

Being the first to offer a type of product or service can give you a head-start over those coming in later. But you need to make sure it is something people really want.

Offering a better product or service requires that you distinguish yourself from the crowd.

Questions you may have include:

This lesson will answer those questions.



Being first

When you are starting a business with a new product or service that is the first of its kind, you have the advantage of creating a niche and leading the pack when others try to copy you.

However, you need to make sure there is a market and acceptance for such a product or service. And you need sufficient funding to sustain the effort over the long-haul.

Success examples

A good example of being first when starting a business is Amazon.com. They were the first to sell books online and are still the leader in that area. However, it took a number of years until Amazon.com was able to be profitable. Fortunately for the company, CEO Jeff Bezos was able to convince investors to have patience and believe in the potential of the company.

Another successful example of being first is the Gillette disposable safety razor. There was a pent-up demand for a safe way to shave. His razor became—and still is—the world leader.

(See the biography of King Gillette for more information.)

Failure example

A failed effort from being first was eToys.com, which started in 1999 and had a similar business model as Amazon.com. The company may have entered online purchasing too early and did not have the demand at the time, such that they went bankrupt two years later.

Being better

The advantage of starting a business with a product or service that is better than the competition is that you can learn from their mistakes and improve upon them.

Success examples

A good example of being better is the Google search engine. Before Google started, users would search the Internet with Lycos and AltaVista, which were well-established and had brand recognition. However, Google founders saw problems with those and other existing search engines and developed a product that proved superior to them. Now Google owns the search engine market.

Another example concerns Henry Ford. When he started his business, his cars were no better than the others in the crowded automobile industry. However, after several failures, he came up with the assembly line innovation. This allowed his cars to be much less expensive than the competition and resulted in Ford Motor Co. becoming number one.

Failure example

However, there have been many cases where a superior product could not overcome the competition.

Sony's Betamax was a superior video tape recorder format, but they could not overcome the competition, such as from JVC. However, one reason is that Sony's format was proprietary, while the video cassette format was not.

What should you do?

If you have a great idea for a unique product or service that no one else is providing, it is important to test its demand before investing too much time or money. Also remember that something new may take a long time before it catches on.

If you have a product or service that you think is better than the others in the same category, you need to think of a way to let others know about it in order to stand out from the crowd.

Summary

You should either the first to offer a type of product or service can give you a head-start over those coming in later or offer a better product or service as compared with your competitors.

Being the first can give you a head-start over those coming in later. Offering a better product or service requires that you distinguish yourself from the crowd.

In both cases, you need to analyze the market and make good plans.


Don't be the last


Resources and references

Ron Kurtus' Credentials

Websites

Entrepreneur Resources

Books

The Business Book (Big Ideas Simply Explained) - Reference chapter

Top-rated books on Starting a Business

Top-rated books on being an Entrepreneur


Questions and comments

Do you have any questions, comments, or opinions on this subject? If so, send an email with your feedback. I will try to get back to you as soon as possible.


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