The entrepreneurial path can be shorter and less complex when your product is entering an established and popular market. However, if your product is late to that established market, you run the risk of being labeled an "also-ran," looking to hitch your wagon to someone else's star.
This is why more entrepreneurs are considering the adoption of a business theory called "blue ocean strategy," which is built on the idea that some companies are better off searching for ways to gain customers in an unclaimed market space, as opposed to trying to compete with similar companies. The term is derived from the book "Blue Ocean Strategy," written by W. Chan Kim and Renee Mauborgne.
Reading about this theory is a great first step, but it's also helpful to learn from someone who has gone through the experience. As a serial entrepreneur, I've operated on both sides of the market-entry equation. For example, the smartwatch company I founded, Leikr, got its start by entering a mature market. With the creation of a smartwatch for long-distance endurance runners, we were launching a focused solution for a globally connected user group, on a global scale. To gain worldwide exposure, we reached out to global opinion leaders and reference shops in target countries.
With my newest venture, Klikkit, a digital health startup that began in a research and development incubator in Copenhagen, we are facing an exciting challenge. Klikkit is most certainly a blue ocean product: the first IoT solution leverages behavioral science to help users build lasting good habits.
Based on these two very different experiences, here are my tips for any entrepreneur considering adopting a blue-ocean strategy for their next venture.
Refine and build on what makes you unique. The blue ocean strategy requires an entrepreneur to differentiate a groundbreaking product that essentially makes competition from existing products irrelevant. Its value proposition is so new and different, it stands alone in a new category.
Educate your potential new market’s audience. With Leikr, we were presenting a product that solved a very specific problem to a finite group of consumers. But with Klikkit, our digital smart button has many potential applications. Our challenge is to educate consumers on a solution for a problem for which they may think there is no solution. The same goes for any blue ocean product. The focus should be on making sure you clearly communicate your value proposition both to the general public and to target partners, to ensure they understand the needs it’s addressing.
Focus on the market need. When you're involved in market-creating innovation, it can be tempting to adopt an "all-out" approach when designing your product and value proposition. However, you run the risk of confusing your audience, and ultimately make it difficult for them to latch onto your new offering. I suggest keeping it simple. Identify a core need within your new market segment and build a simple solution that fulfills this need. Skip the bells and whistles.
I hope you have learned from my experience so when the time comes to launch your blue ocean strategy, you're prepared. I'm happy to answer more questions if you are about to embark on this experience yourself.