I bought this reasonably cool pair of board shorts for surfing this summer.
They cost me a whopping $80. Which is what I call ‘insult pricing’. It’s a pretty simple equation actually. The key players in the surfwear industry (Billabong, Quiksilver and Ripcurl) charge these prices because they can. They don’t have any ‘credible competitors’ in this board short subsegment of clothing.
In recent years surf brands have been hit by many competitors in other areas of the market which they used to ‘own’. Especially in t-shirts, from the myriad of streetwear companies, to the uber cool on-line players like Neighborhoodies and Threadless. Interestingly the shorts in this photo would cost >$5 to make. There is significant margin in the product. Such high margins often begets competitive entry into the market place.
The arrogance of said surf brands has invented an opportunity for a nimble entrepreneur to steal part of this market. And the way to do it is exactly the way Threadless have. Go online and build a community to design the uber cool boardshorts / shorts and sell them globally at a fair price. In fact, surf wear is so clichéd and over branded these days that I avoid wearing it. Most of the designs are very rank and have really lost their edge. I only use surf brands for surf equipment. The only reason I bought the pair in the photo is ‘lack of options’.
If anyone knows some one already doing it – let me know
If anyone wants to do it – let me know as well. I think it’s worth ‘investing in’.
Competition is eternally existential. We compete for love, money, attention, fame, wealth, recognition, and sometimes, we even compete for food. Turns out humans aren’t the only species who must to compete to survive. All living things must do it. Even trees in a deep forest compete for sunlight by growing as quickly as possible forgoing width for height.
What I find most interesting about competition is how we or any being chooses to do it. When a competitor catches us unaware, they usually achieve this through using some form of subterfuge. Like growing in a smaller segment of the market. Focusing on a neglected geography. And the really smart competitors disguise what they are doing so you don’t even see them coming. A little like Google has done to Microsoft who was overly focused on the ‘desktop’, while the world was moving to web app’s and gathering and storing of information externally.
I noticed this phenomenon first hand recently. My business was moving along swimmingly (which in this case is my tomato plantation). As you can see from the photo below. My Roma’s looked healthy and almost ready for the picking:
But upon closer inspection a competitor had been eating away at my market for quite a long time without me noticing. Once I turned around the tomato to inspect the back side of them – I was devastated to find my competition. They caught me napping and had a very big impact on my market share. As can be seen here:
How did they manage this?
- The caterpillar was smart enough to attack on the reverse side out of view.
- His color is exactly the same as the tomato proving an excellent camouflage.
- He waited till the market was already developed (by me) and the tomatoes had a reasonable size and were worth attacking – in this case risking his life over!
- In true terrorist fashion he penetrated the market at one entry point and ate it inside out. That is, the caterpillar was so deep inside the market, he was completely out of view.
None of this was by mistake. It has been driven by millennia of evolutionary survival and subsequent genetic coding. Nature is smart.
The implications for startups are many. When we start out to compete, the best thing we can do is replicate what nature does. Stay out of harms way. Stay small and unseen. Try and gain some momentum and size. If we’re lucky will have built our share of the market and be ensconced before anyone notices.
(FYI – I picked the tomatoes, and placed them in another location of the garden to let the caterpillars fight another day – they may just leave some seeds which will flourish next season!)
Got an idea for an iphone app you can’t find?
So write the brief for the app you want and can’t find, contact the developers and get it made. Get your itunes account up, choose a cheap ‘low barrier’ price, like a ‘dollar’ or so and sell that puppy. Remember it’s better to sell a $1 iphone app a lot of times than a a $5 or $10 one no times at all.
This micro-entrepreneurs opportunity is as simple as they come. Global distribution with an engaged audience – rare indeed. A classic ‘trend hijack’.
Go now – make it, sell it.
People are very time poor, or maybe just a little impatient. Regardless of which it is we have to be able to tell our story quickly.
Vanguard Investments do it in 2 seconds. Click here to see how they do it. (Watch the animation)
Even this chart below tells the story on long term ‘index’ investing. Of which Vanguard are the founding forefathers.
The recent downturn is a best a ‘blip’.
How long does your startup story take to tell? Here’s a tip – we’ve got a few seconds at most.
If you’re an entrepreneur and you’ve never been ‘people watching’, then start up blog strongly recommends a session. For a lot of reasons it’s a cool thing all entrepreneurs should do. For one, all our revered entrepreneurs are champion trend spotters. And they spot these trends a long time before they are reported in the Sunday newspaper lift outs.
Go some where busy, go somewhere where there are zillions of transactions, go somewhere sans commerce, go where families hang out, go somewhere singles hangout, look for the subgroups, watch people looking at shelves in stores – guess their decision process, see if this process is the same for all or different for all, see what they wear, see how they move, how did they get there, where are they from, bring a notepad with you and write down ideas, go places you’ve never been before…. Watch people, guess their motivations, view their life in action and then we’ll be the ones gaining life experience…. Just go and watch.
The funny thing about our world is that we are all in it every day, but very few of us are actually paying any attention to it. Step off the stage and become the director. Make it a habit to pay attention to what is going on in our world.
As entrepreneurs and marketers we are lucky. We can do our homework everywhere we go, and our start ups are the key beneficiaries.
The Chief Mojo Officer, or the CMO.
Sure, I asked him what they did and here’s what he told me: (with some embellishment)
“Firstly you have to believe in mojo. If you don’t believe in mojo, then forget it. If you do, the CMO is in charge of general “Vibe Strategy”. The CMO has to make sure that the ‘vibe’ is right. There are no real quantitative measurements for mojo – you can just feel it. The CMO is the type of dude who can just feel it. They’ll know when it’s out of whack. The CMO is in charge of things which are nebulous, but actually matter. When the CMO has the general vibe grooving, the mojo is right, and revenue happens.”
Good news for startups with small staff is that we don’t have to wait for the employee head count to justify a new CMO. We can and should be doing it anyway. It’s our job!
But when you make it, I reckon it would be the best investment any company could ever make.
I recently had some beers and a meal at a place called Little Creatures dinning hall in Melbourne Australia.
For the uninitiated, Little Creatures is a craft beer which has it’s origins in Australia and has recently opened a flagship ‘dinning hall’ – seen below.
They’ve simply taken this to a new level. I’m not taking about the fact that they have weird and groovy beer flavours, all naturally brewed. I’m talking about the way they take you on a personal journey with their service.
My favourtie was the beer education programme. They have a ‘pony show’ – I don’t think it’s called that, but it is what I’ll call it for this post.
You get a taste in little groovy pony glasses of all their different beers, then choose one you like. One of their ‘Little Creatures Beer Experts’ comes and sits down on your table with you and they explain all the different types of beers. A real sit down for 10 minutes. A rare treat when the usual sitiation is waiting 10 minutes for crappy service in bars and restuarants. They teach you how to taste each beer and the slight nuances of each. They even provide an idea what type of people generally like the different types.
It’s really nice and fun. I even heard the word “sessionable” to describe a beer – They invent some nice jargon to make you feel part of a tribe. Cool.
No need to advertise this little venture. We’ll do that for them….
And this is what cool startups are doing in retail.
My problem is…. I’m a really nice guy. Really, I’m reasonably nice, just ask anyone who knows me….
Actually it’s more I’m not as smart as I’d like to think I am. You see, often I don’t do people any favours by trying at all costs to be, Mr Nice Guy. Even if it’s at the expense of helping them grow. The interesting thing is that I usually get what I give, and that is, people are generally very nice to me. Even if what I need on occassions, is some home truths to help me grow.
What I really need is tough love.
Turns out my team also need some tough love too.
Tough Love – Startup blog definition:
Having a team let each other know ‘in no uncertain terms’ when members are goofing off, at the expense of agreed upon and shared objectives.
It doesn’t mean we turn into nightmare colleagues or the boss we always hated.
It means that we have a culture where we don’t want to let each other down, but we pull each other up in tough times and provide mutual motivation. We give each other guidance when we need it.
Photo by Chuck Rogers
Words by Steve – rentoid.com
When we think about innovation, our minds get lost in big ideas and large investment. The Space shuttle, Electric cars, desalination plants, the Airbus A380. We’ve been influenced by mainstream business media, and the military industrial complex. As entrepreneurs we’d be much better placed to think as micro as possible when considering how to innovate. Because unless we are ‘inventers’ or ‘engineers’, the only innovations we need to care about are those which get to market.
Take this simple innovation from the publishing industry.
Magazine subscriptions which have been repacked to be sold in a new / yet existing distribution channel.
Before this shift in mindset, magazine subscriptions were only sold as in magazine leaflets, through call centers and via door knocking. Enter new packaging format, and all of sudden a magazine subscription is being retailed in newsagents and bookstores (This photo was taken in Borders). It becomes a simple ‘gift’ which provides us something we can hand ‘hand over’ to the recipient to touch and hold – we can even gift wrap it. It opens new revenue possibilities.
It’s clear that there is little capital expenditure with this innovation, which is simply a widening of distribution. In fact – new forms of distribution are often the most profitable innovations.
Start ups – When innovating, think micro.
Steve – founder rentoid.com