During freshman economics classes, the student is often introduced to two keystone concepts that have governed the financial markets for centuries: supply and demand. Supply refers to the available amount of a particular resource, while demand points toward the desire of the public to acquire that resource. The student is told that in order to be a successful entrepreneur, he should look at which commodity or service has the highest demand with the lowest amount of available supply, and seek to fill that gap. If he manages to become one of the few providers for a product that many people are clamoring for, orders are sure to follow, and profits will start rolling in.
This is all good advice, but it runs into a few not-so-minor problems before the aspiring entrepreneur can even lace his shoes.
The market is oversaturated
In today’s world where communication happens in split seconds and countries are more connected than ever before, it’s difficult if not downright impossible to become the sole provider of a particular merchandise. If someone wants to order a product, it is no longer necessary to find it in a brick-and-mortar shop somewhere close by. The internet has allowed the import and export of goods through online transactions so that the customer doesn’t even need to leave his house. Even if there is no one around to provide the item, international deliveries have eliminated this problem.
Competing with juggernauts doesn’t end well
Some entrepreneurs readily accept the notion of an oversaturated market, but they still want to wet their feet and jump into the shark tank. After all, as long as they can provide superior customer service and higher-quality items, everyone will soon realize that they are the best in the business.
While there have been some David-and-Goliath success stories of no-name individuals who start from the bottom and overtake more established institutions, these are the exception. It is much more common to see aspiring entrepreneurs crash and burn as they attempt to bite off more than they can chew. It takes a lot of patience, time, resources, and nerves to attempt to make something of yourself in a field that is rife with other people doing exactly the same thing. Everyone thinks they are a special snowflake, but in the end only a handful truly are. For every restaurant that makes it big, there is about a dozen that closes shop by the end of their first year, burdened by debt, with nothing to show for it except emotional scars to glean lessons from.
A way out that can work for anyone
Rather than compete with companies that are bigger, better, and have more money to spend than you, it would be wiser to use outside-the-box thinking. One such way is to subvert the traditional supply-and-demand model. Instead of looking for customer demand and supplying it, a few mavericks seek to create demand where none exists and then become the sole supplier in a brand new field.
A good example is the iPhone. Mobile phones weren’t invented by Steve Jobs. They had been around for over a decade before Apple decided to create their own in 2007. However, when the first iPhone was released, people who had never even thought of owning one suddenly found themselves unable to live without it. It looked like a device straight from the future. The keyboard that dominated every other phone had been replaced by a slate-style touch interface. When users pinched the screen, the image on it zoomed in and out. When they wanted to scroll, all they had to do was swipe their finger. What’s more, music and web surfing were incorporated into the standard phone services. Today, all of these features are commonplace, but back then, only Apple was the provider. It’s no surprise that they presently dominate about 40 percent of the market share of smartphones.
This lesson applies not only to big companies like Apple but beginning business owners as well. Rather than try to compete with other people in your niche, precede demand by pioneering a new way of doing things. Whether it’s improving an existing product, creating a new one from scratch, combining two or more items in an original way, or else reviving the former glory of forgotten merchandise, there are a lot of things you can do to make sure that your company is the only one ready to supply this service. If done right, people will soon realize that you have created something that they themselves have never even thought about but have always subconsciously wanted. In this case, you have all the cards, and the competitors won’t even know that they haven’t been playing with a full deck.
Stray off the beaten path
Doing things your own way takes a whole lot of risk, but choosing to go into business has always been risky. In order to succeed in this cutthroat industry, it’s no longer feasible to just do what everyone else is doing. You need to fill a need that isn’t even there but is waiting for you to uncover it. Once society recognizes that you have broken new ground, everyone will be scurrying to jump on the bandwagon. By this time, you’ll be the one driving it.