Want to Scale Your Business? Stop Worrying About Your Competition and Focus on These 3 Things Instead.
Think about the three P's: positioning, pricing and people.
Q: What are innovative ways to scale a business that most people don’t discuss? — Diana, Chicago
The first rule of scaling a business is “Don’t worry about the rules of scaling a business.” If you’re copying others, then you’re always following their lead, which means you pick up breadcrumbs instead of getting the loaf. Instead, look for the leverage only you can create.
That requires an innovative strategy on three fronts: positioning, pricing, and people.
Let’s start with positioning. Look at your three biggest competitors and make a list of the problems they solve and why they exist. Now add yourself to the list, but don’t think about how you’re better than them. Think instead about how you’re different — because remember, you don’t want to be competing.
Positioning yourself as different creates two unique opportunities that are important for scale. First, you control the narrative — which means you don’t have to use the same marketing language as everyone else. You see a problem differently, create a new approach, help people solve problems they didn’t know they had, and therefore define the problem and solution.
Because you’re doing this, your earliest customers are likely to be your most passionate. They aren’t window-shopping and comparing you to everyone else. They are your customer because you struck a nerve. They’ll give you more feedback, support your journey, spend more money with you, and — if you deliver on your value proposition — they’ll spread the word to others just like them.
The next issue is pricing. It is often viewed as an art, but it is much more scientific than people believe. If you want to scale, your product should be informed by your pricing strategy (and not the other way around).
Before you even create your product or service, you should know what people will pay for it. This isn’t solely about the total dollar amount, which is important. It’s also a way to determine how you charge and people’s willingness to pay. Think of it this way: Netflix didn’t take down Blockbuster just because the company defined a new category (streaming and subscription). It was because Netflix’s value proposition was radically different from Blockbuster’s. Once that mattered to consumers, they were willing to pay a monthly fee for it.
To assess your price, run some tests. Identify your target market, pitch your product at a specific price, and ask about their willingness to pay. (You can do this in person, or with online surveys.) People’s responses will give you clarity about your company’s value and perceived worth.
The final aspect is people. In this case, we’re talking about your team. Just like in sports, the best teams win championships.
If you want to scale faster, invest in expertise and strengthen your weaknesses. That can be costly; you may need to give up some equity or find a way to out-pay the competition. But if you do it right, and get the people who understand opportunities and efficiencies, you can potentially speed up your process by years.
When you start looking at different ways to scale as a competitive advantage, that’s when you’ll likely find your leverage. And if you execute well, growth should soon follow.