Reinventing? Don’t!

Today, the idea that to be a successful entrepreneur you have to meet user needs is spreading. Finding out what users need, while enabling businesses, does not warrant any success. Proper identification of user needs is a mandatory step that merely gives you a chance for profit, but whether that profit will come — it is another pair of shoes.

Even successful execution of a plan will do you no good if the plan is wrong.

One of the common patterns of entrepreneurship is doing something better. It is a straightforward yet powerful technique — you are expected to identify less-then-good service, and then make it better. Reinvent it, to use a buzzword.

The key benefit of this approach is that you already have a group of potential customers. They know they are unhappy. They know what to expect and how to compare two products. They look like easy prey.

But without a thorough understanding of the entire business environment, without applying thought to it, you are prone to your competitor counteraction.

In evolutionary biology, there is an effect of the Red Queen, which describes a situation, where multiple adaptations of different species keep the status quo. It applies to business, too.

You have to have a solid grounds to build improved version of something and believe that your competition will not mimic you. Such situations happen when other providers suffer from inertia and are unable to change, but unless you have identified why they cannot change — you have to assume they will catch up.

Or admit, you are gambling.

Things get even more complicated when you are trying to reinvent not the entire service, but just one, small component of it. In such a situation, you are not winning the customer. You are stretching him, which means that your competitor will have a chance to improve and get him back, and you have to either know why he cannot do that — or admit, you are gambling.

Now, if your competition is capable, do not think you will be able to grow your business. Your only option is to sell your undertaking, and the price must be attractive enough to prevent your competition from in-house development. Which, in turn, imposes very strict restrictions of how your success is defined — as it is no longer enough to win customers — you will have to run your project more efficiently than your competition will be able to do in the future. Sounds difficult? Yes, because it is so.

If you would like to learn more about situational awareness, avoiding pitfalls and building meaningful strategies, visit this page.