Build A Solution That Is 5X Better Than The Competition … Otherwise It’s Not Worth Doing

Over the weekend, I had a fantastic conversation with one of my partners on launching new products and services. Here’s what we were discussing.

A lot of businesses that come to us looking for funding and advice are usually offering their market a solution that offers a 10-30% improvement over the norms accepted in their industries. Some of the business plans help people save 15-20% on their monthly expenses and others help companies increase sales revenue by 30%. You get the idea.

Startup founders need to be much more aggressive in their approach. You need to cause serious disruption in your industry and overwhelm your clients with massive value. Products and services that offer 10-30% improvements wont cut it.

California-based Solar City (a company that installs solar panels on homes and businesses) is a fantastic example of this.

Stereotypically speaking, solar panels are expensive. Solar City took a look at the solar industry and attacked the BIGGEST problem, which is the cost of installation. They did not reduce the installation costs by 20% or 30%, they decided to create a solution that eliminated installation costs altogether. The end result was a no-money-down solar panel installation solution. They completely transformed the solar industry.

Imagine this…

If there are 100 companies servicing a market and you come in as the 101st, you’re not really adding any value to the marketplace if you are offering the same products or services as everyone else. You’re a redundancy. Being redundant means you’re not really needed, and if you are not needed the marketplace will promptly reject you.

One of the biggest mistakes I made in my first company was imitating what my competitors were doing. I was trying to copy what hundreds of other companies were doing. This made me redundant. Imitation is not a good strategy for entrepreneurs in today’s startup environment.

Don’t imitate or copy what other companies are already doing. Define what a 5x better solution looks like in your industry and do that.

Look … if you are going to take the risk and go through the pain and struggle of launching a new product or service, you might as well design it to be 5x better. Creating something that is only 10-20% better is just not good enough in today’s hyper-competitive world. Why would you even take the risk?

Competition levels are so high that you can’t expect to enter a big market and win by offering a redundant solution.

Offering people a slightly better solution is not good enough. It’s too risky. Slightly better or even a solution that is 2x better does not create enough motivation for people to consider making a change. Only when your solution is 5x better than what your competitors are offering are you likely to succeed.

The reality is people hate to make changes in their lives. They like to stick with what they know and what they are comfortable with, even if it’s an inferior product or service. Massive value has to be communicated just to have a shot at getting someone to change their mind and buy your product.

The gain your prospects receive by entering into a relationship with your company must completely overshadow the pain of making the switch. That’s why you must be thinking in terms of 5x better solutions. Look at what’s working in your industry and ask yourself, “How can I do this 5x better?”

Creating a solution that is so undeniably better positions you and your team with a tremendous competitive advantage. People will gravitate towards you and your business.