Everyone has a Weakness
Everyone has a Weakness
Competition is fierce, and you likely have larger competitors with more capital and resources. How do you win? Focus on their weaknesses.
If you are pursuing a business that is evenly remotely worthwhile, you will have competitors. Sometimes those competitors exist before you get started, or sometimes they start popping up when they see your business finding success. Either way, you will have competitors and it’s likely they will be larger and better funded than you. Even worse, your competitors will copy all of your great ideas and learn from all the lessons you learned the hard way.
How do you win against such uneven odds?
You do not win in business by playing the game by someone else’s rules. If you are going to win, you are going to define your own rules and make sure they favor your business and your strategies. You do that by focusing on their weaknesses.
Every business has a weakness since every strategic decision you make creates both strengths and weaknesses. Here are some examples:
Decision 1: Price
If you choose a HIGH price…
Strengths: You can make more money from fewer customers, and afford to spend more time with each customer giving them a premium experience.
Weaknesses: Your product is expensive and many customers might not be able to afford it, limiting your target market size. You are also vulnerable to cheaper competitors.
If you choose a LOW price…
Strengths: Your product is cheap and everyone can afford it. You can likely steal customers from more expensive products.
Weaknesses: You need lots more customers to make the same amount of money, and can’t afford to spend much on their experience.
Decision 2: Growth model
If you choose product-led growth…
Strengths: You can grow quickly and cheaply, since customers do the work for you. As a result you can charge less for the product.
Weaknesses: You rely on the customer to know what to do with your product and lose direct feedback from them on what they like/dislike. If they are confused or don’t like the product your growth stalls and you won’t know why.
If you choose outside sales…
Strengths: You can educate customers about your product and value, while also learning from them about what they like/dislike. If they are confused you can clarify things for them.
Weaknesses: It is expensive and slow to grow as you need to hire and train sales people. As a result you need to charge more for your product.
Decision 3: Capitalization model
If you choose to raise Venture Capital…
Strengths: You have plenty of capital to grow quickly, ahead of revenue.
Weaknesses: Your investors have very high growth expectations, and if you miss them you will struggle even if the business is otherwise fine. It can be harder to make strategic decisions as there are more people involved.
If you choose to bootstrap…
Strengths: You have full control over the business, so you can grow as quickly or slowly as you’d like and make whatever decisions you prefer.
Weaknesses: Your growth is limited by cashflow, which means growth is likely slow. You will always be resource constrained.
In all of these cases, a critical strategic decision gives rise to both strengths and weaknesses regardless of what you choose. This is true of all strategic decisions, which means all businesses have weaknesses! If you want to beat the competition you just need to understand the decisions they made and in doing so what weaknesses they took on.
Remember, this same kind of competitive strategy can be used against you. You have weaknesses and they will be exploited by competitors. The only real question is what you do when that happens, and how exposed your business will be if it happens.