You Don’t Have To Be First, You Just Have To Be Better

Brandon Eley

It’s widely accepted that there is an advantage to being the first to do something in business. The market share you gain can be very valuable when competitors finally come along. A lot of times, business owners see that a particular segment of the market is already saturated with products or service providers and think they can’t compete.

In reality, being first to the market has rarely been linked to lasting success. You don’t have to be first to be incredibly successful, only better in some way or another. There are numerous case studies to support this. Apple wasn’t first to market with either the smartphone or the tablet, yet they successfully claimed dominance in two markets that already had numerous large players.

37 Signals is another company that has become incredibly successful in an industry once dominated by big players like Microsoft. Basecamp has become a wildly popular project management application, which over 5 million people have used.

How can you compete with the big guys in an industry that’s already saturated? Here are a few tips…


Basecamp was successful because online and desktop project management applications were overly complex … too complex for most small business owners. Traditional software developers release “versions” and, to add enough value to get users to upgrade, they feel the need to add lots of new features with every version. This has a big downside though — over time software gets bloated and harder to use.

Basecamp saw that as a market opportunity, and made their online project management application so simple lots of people criticized them, claiming it wasn’t worth what they were charging. But millions of small business owners were relieved to have an option that was simple to use and did just what they needed, and nothing more.

By making an incredibly simplified product or service offering, you could take a significant slice of the market share.

Target a Niche

Indochino is a great example of a new brand that has staked its claim on the custom tailored suit category of the men’s fashion market. By targeting a small niche (custom tailored suits) Indochino was able to innovate where other labels have largely stuck to tradition.

Indochino devised a completely new production cycle where customers measure themselves at home, order completely customized clothing from their website, and the suits are hand-tailored in China and shipped FedEx Air to customers in just a few days. The result is a custom tailored suit for a fraction of the cost of going to a traditional tailor shop.

The jury is still out on Indochino’s success, but they have secured several investors and have amassed a loyal following in a very short time. When you look at a small niche, you can find creative ways to improve processes, giving you a unique selling point over the competition.

Focus On a Pain Point

The dedicated web hosting industry was known for horrible customer support for years. Long “terms of service” and “acceptable use” policies abdicated responsibility for unmanaged servers, and hosting companies charged realitvely high prices for simply providing access to server hardware and a network connection. “Managed” servers weren’t much better — often times the only thing that was managed was the core operating system and default software, and everything else was the responsibility of the customer.

Rackspace saw an opportunity to change that, and has effectively created a new market for fully managed dedicated hosting. They call their support “fanatical” and there really isn’t much they won’t do for customers. I once mentioned something on Twitter about a new product offering of theirs, and within minutes I received a phone call from someone at Rackspace. They had seen my tweet, plugged my name into their customer management software and found my direct office line. He said “I dont’ want you to think I’m Twitter-stalking you, but I just wanted to see if I could answer any questions or help in any way.” Wow!

Change the Paradigms of the Industry

When there are several key players in an industry already, it’s not uncommon for the industry as a whole to grow lethargic, with very little innovation or change. The music industry is a perfect example of this … even as digital content became wildly successful, the music industry still did not innovate beyond selling tunes online. Now, companies such as Spotify and Pandora are challenging the traditional ways the music industry has worked. They have given us new ways to discover and enjoy music, and are even competing with the giant in the industry, Apple’s iTunes.

As an outsider to an industry, you can often find better ways to service potential customers because you have a fresh point of view. Use that to your advantage, and you could really disrupt a well-established industry or market.

Your Odds Are Better Than You Think

Don’t hesistate to enter a new market just because it’s already saturated — chances are you could make a big impact and steal a significant slice of the market share from the competition.