Recently I was talking to an entrepreneur who was launching a new product and wanted to talk through a few ideas. As we drilled into his product it was clear that there were a number of well-funded competitors already in the market. When I mentioned this, he didn’t seem phased and said that they are “rolling into a crowded market.”
Here are a few thoughts on rolling into a crowded market:
- If it’s a market that’s saturated with legacy technology, the new technology needs to be 10x better (not just twice as good) to get people excited about changing
- If it’s a green field market (customers are buying this technology for the first time), the solution needs to be compelling enough to get them to try it out (the number one enemy is no decision or no action — the status quo)
- The go to market strategy needs to be strong enough to beat the competition, assuming a solid product (better marketing, stronger sales team, differentiated partner program, etc)
- Sufficient resources need to be in place (or low burn) to spend enough time figuring out the market dynamics and a strategy to win
- Pick out a niche that’s winnable yet relevant enough whereby the product can be expanded to a larger market
Startups roll into crowded markets all the time. With a solid product and strategy, crowded markets are still readily won.
What else? What are some more thoughts on rolling into a crowded market?