Sam Walton became the world’s richest man in the 1990s using one fundamental strategy. He built his stores in smaller towns where his competition didn’t go because they thought there weren’t enough people to support a store. (Which just shows how wrong you can be.)
Southwest Airlines used the same initial strategy in building their company on less-traveled routes and secondary airports, where the gate fees were less.
I built a multimillion-dollar business in an industry no one had thought about—the karate business—that at its peak had 20,000 schools in the US alone. Earlier in my martial arts career, I had the only karate school in two different cities.
Apple Computer has specialized in developing products that no one asked for in focus groups, because people can’t ask for what they don’t know. The products usually weren’t completely new; rather, they combined existing elements and great designs in new ways.
The Body Shop, Tom’s of Maine, and many other companies created new environmentally friendly products long before the interest was obvious to big companies.
Netflix developed the idea of mailing movies to you because people didn’t like the pressure of having to rush back to the video store. Yet Blockbuster and other stores missed this market because they were entrenched in real estate.
Similarly, Amazon.com captured the online book market that was missed by Barnes and Noble. And physical bookstores seem to be going the way of video stores.
As a small, nimble competitor without a big investment in stores and infrastructure, you have the chance to think outside the box and do things differently. As the famous consultant (and author of 40+ books) Peter Drucker said, the railroads missed dominating the airline business because they thought of themselves as in the rail business, not the transportation business.
Work to find those niches where you’ll have a big advantage over entrenched competitors as you establish yourself.
- Where are the holes in your market?
- What business does not exist in your town?
- What markets have you failed to fully exploit?
- What veins of gold could be mined deeper?
There is money in holes.
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