How start-ups are competing with the Goliaths of the tech world
Launching a start-up today in an already-established market can often feel like fighting a Goliath. Even the mere thought of competing with the big guys can deter budding entrepreneurs from turning their dreams into reality, put off by the “what ifs” and the huge risk they foresee in front of them.
Despite this, today there are so many inspiring examples of small start-ups taking on the big guys and becoming market leaders in their space. Let’s take a little look at some examples!
Video conferencing tools: Zoom vs Skype
Pre 2020, unless you worked in the tech scene, you probably hadn’t heard too much about Zoom. Today, the video conferencing tool is pretty much a household name, and is worth a staggering $22.3 billion(USD).
Zoom’s founder and CEO, Eric Yuan, left his job as Cisco’s VP of Engineering with a background in video conferencing (he was one of the founding engineers at Webex before this) due the frustrations he felt around the product they were delivering to customers.
According to The Financial Times, he also had his pitch for a new, smartphone-friendly video conferencing system turned down by Cisco in 2011. Leaving the company with 40 other engineers, together they embarked on a journey to build a video communication tool.
At the time, many people thought Yuan was crazy for attempting to launch a video conferencing tool in an already-crowded market. The likes of Microsoft, Cisco, and Adobe already had their feet planted firmly in the ground. But since then, it’s fair to say that Zoom has become a firm favourite of consumers, evolving into a staple tool used by workplaces, schools, universities and families across the globe.
Communication tools: Slack vs Microsoft Teams
Next up is one of the fastest-growing SaaS start-ups in history. Slack is a chat and productivity tool that has become the heart of communication for many businesses, from start-ups to Fortune 100s.
One aspect of Slack’s stellar success in recent years is its ability to create a solid product with a user experience far beyond what its major competitors, such as Microsoft Teams, Skype and Facebook Workplace could offer. Its fun, lively and colourful aesthetic along with its innovative software features and solid brand sets the product apart from the often drab interfaces users have been used to seeing. It’s for this reason that it grew from a $0 to a $27 Billion business in just six years.
What can entrepreneurs learn from the above success stories? Keep reading to find out more.
1) Focus on your customers
In the race to market launch, many start-ups make the mistake of failing to focus on their customers from the bottom up — something Slack certainly avoided.
Before even launching, Slack dedicated a large amount of time understanding how people were using the tool, which turned out to be a major strategic advantage.
Did you know that Slack was actually born out of a gaming company called Tiny Speck? Slack’s founder, Stewart Butterfield intentionally set out to create a SaaS product for the workplace. They actually developed software solutions for an internal chat tool - soon to become Slack - for themselves. It wasn’t until later on that they realised their tool’s commercial potential.
During those early stages, Butterfield realised that although the product served his small team well internally, the experience changed pretty dramatically as the size of the team grew.
And so, the team would spend time really listening to the feedback from the early adopters and refining the product as they went. Each time the team would implement changes, larger teams would be invited to try the product, feedback was collected, and so on. The focus wasn’t on growing as quickly as possible, but rather growing steadily, building a solid product based on how people were actually using it.
The lesson? Dedicating the time to truly get to know your customers will help you design a product that serves them best. But the journey doesn’t stop there. With early adopters, you should be collecting every bit of feedback you possibly can, making adaptations and improvements to your product based on the insights you have uncovered.
Consider who’s driving the development of your product — you or your users? Business owners must spend time truly understanding its audience and the user experience they crave from a product like yours. Only when you truly know who you’re catering to can you really understand how to serve them.
2) Differentiate from your competitors
Competing in a crowded market becomes a lot easier when you’re not directly competing. To increase the chances of finding success, you must clearly differentiate your product or service from your biggest rivals.
Let’s take a look at Figma as an example. The collaborative design tool is one of industry giant Adobe’s biggest rivals in the space, so much so that Adobe recently acquired Figma for a whopping $20 billion.
The fact is, Adobe has long struggled to keep pace with Figma’s innovations. The underdog has been hailed a success due to the design of its product with approachability and teamwork in mind. What set Figma apart from the rest was its ability to build a browser-based product with hyper-collaborative features and a seamless user interface experience that went down immensely well with UX professionals.
To differentiate your product or service from your competitors, you must conduct a thorough competitor analysis. Consider their strengths and weaknesses and the opportunities you can take advantage of from any gaps they’ve left in the market. Who knows — you could create the next Figma of your space!
3) Make a better product
In today’s hyper-competitive market, it's not enough to simply make a good product and hope for the best. In order to be in for a chance to compete with the big guys, businesses must focus on developing the best possible product in the market.
For Zoom’s founder, the fret of competition was never a question. His solution was pretty simple — in order to build success in a crowded industry full of established players, he would simply build the best product in the market.
“It’s extremely crowded, but the potential is huge. If our product is better than any others, we can survive,” Yuan explained to Forbes.
It’s not enough to just create a killer marketing strategy that draws in customers. While that might bring you short-term success, in order to be in it for the long haul, you need to ensure your product or service is actually good and delivers on the promises you are communicating through your marketing.
If your start-up has any hope of reaching soaring heights of success by relieving customer pain, it must solve the problem better than any competition out there.
Many start-ups set out to disrupt the world of work. There are also plenty that fail. To be a Slack, Zoom or Figma of the world, you must be confident that your business plan takes the above points into consideration. Yes, the world is full to the brim with new start-ups right now — but yours has every chance at becoming a Goliath.
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Images by Andras Vas and Austin Distel on Unsplash