Whether you’re a ‘solopreneur’ or a micro-agency, when it comes to positioning your business in any market you should have only one goal – create a monopoly.
When you read the word ‘monopoly’ in business, you’re probably thinking about huge companies that dominate an enormous industry, like Google who monopolises search engines (believe it or not there was a time when people used different search engines) or the how your local train company is the only rail option for commuters. But a monopoly does not need scale; it merely required dominance.
A pure monopoly is a market structure where one company is the single source for a product, and there are no close substitutes for the product available. For most industries, there is not a pure monopoly but a monopoly where the company in question really does not have to pay much attention to what the alternative solution is doing.
And that’s what you need to do. Create a monopoly so that you don’t even need to pay attention to the competition.
Now before you close down this webpage and dismiss me as being unrealistic and having no idea how hard/big/complicated/establish your industry is, hear me out…
Finding your niche
You don’t have to take over an entire multi-billion-dollar market. Your goal here is to find a niche that you can dominate in a monopolistic way. For example, you might be a photographer. Yep, it is pretty hard to create a monopoly on merely taking photos, so your niche down a bit and become a pet photographer. Then, you specialise in dogs and only in your local city, and finally, you might specialise in ‘dog portraits’ – the idea here is that these are staged photos rather than action shots.
All of a sudden when someone in your local city wants a portrait of their dog, you’re the only option anyone would recommend. It’s easy for people to recommend your company when you’ve defined yourself as the only option.
Now you might be thinking that I’ve gone and created a niche market that is too small, but chances are you’re making some non-monopolistic calculation mistakes.
With your new niche monopoly, you don’t need to spend as much money on advertising because you’re receiving more referrals. You can put your prices up because you’re facing very little pricing pressure from the alternatives. You also get to benefit from creating that market, so if your specialty happens to take off as a trend, you’re already ahead of the game and would be able to grow your market.
Unfortunately, many small businesses fall into the trap of thinking they need to take a little slice of a big market, how often have you heard someone say, “I just need 1 per cent of the market and …”
What actually happens in that scenario
You’ll have to compete on price. Price is one of the best quantitative ways customers can compare two options. You’ll need to advertise a lot to have people notice and try your business. You’ll also need to be prepared to take pretty much any work that comes your way, leaving little time to perfect and expand your business. Worst of all, you’re in constant competition trading market share with your competitors.
If you establish your monopoly correctly, then you have the opportunity to expand. In the example above you have a choice, you can add another city or add a different animal to the portfolio. Either option might work, but for what it is worth I’d lean towards a second city in my fictitious example.
You’re not worried about competing head-to-head with another company or another startup business because you own the photographic dog portrait market. But you should be concerned about disruption; maybe a local painter starts to produce dog portraits, at a higher price point, you’d find yourself squeezed into a terrible middle market servicing only those that can afford professional dog photos but can’t afford a painting.
So if your business is one of many in a crowded marketplace, have a look at your best clients/customers and see if you can spot a common thread. Maybe you’re an accountant and your best clients are all footballers.
Maybe you’re an electrician who has restored lots of antique lamps, maybe you’re a hosting company that specialises in WordPress or maybe you’re a marketer who just loves Startups – actually, don’t be that person, that’s who I am. ;)
Take the challenge now. Find your niche. Become known as the best in a small market and discover the benefits of creating your own niche monopoly, where customers start coming to you because you’re the best and only player in that space.
About the author
Gerard Doyle is a veteran marketer with 22 years of experience in marketing and advertising. Gerard has worked for three of the world’s largest advertising groups with brands including HP, GM, Coke, Microsoft and H&M. He has also founded three of his own Startup companies and now exclusively works with Startup founders through Fractal, a startup marketing agency.