3 WORST pieces of advice crack entrepreneurs give that can HURT your business..
Summary
- Don't worry about being first to market. It can be tough and isn't necessary for success. You can build a business without being the pioneer in a completely new category.
- Instead of focusing on being unique, concentrate on offering more value to the customer. You don't need to create a brand new product, but you can stand out by refining your offer.
- Consider niching down, which allows you to offer specialized services and potentially charge more, thus increasing value.
- Use clever packaging and segmenting of your customers to increase perceived value and revenue without altering the core product.
- Be cautious about entering a market with little to no competition. It could indicate that there's no demand for the product or service.
- Instead of attempting to create a completely new market, make minor but impactful changes to existing offerings to improve upon them.
- Use your business strengths to create a "special sauce" that will set you apart from competitors without needing to be drastically different.
- Aim for consistent, moderate successes (base hits) rather than swinging for a risky home run like some of the large outlier companies (like Facebook or Twitter). The majority of businesses thrive on reliable and sustainable growth.
Video
How To Take Action
I would suggest implementing simple changes to your existing business or new venture that focus on delivering more value rather than trying to be the first to a market. Here's how you can do that effectively and without spending a lot of money or time:
- Focus on adding your own special touch to a product or service that already exists. You don't have to reinvent the wheel; just make minor adjustments to improve it.
- Look into niching down. By serving a specific group really well, you can offer more specialized services and often charge more for your expertise.
- Try repackaging your products or services to better suit the needs of different customer segments. This can make your offer feel more personalized and increase its perceived value.
- Be wary of markets with no competition. It might seem like an opportunity at first but consider the possibility that there might not be a demand for that product or service.
- Aim for consistent, smaller successes instead of trying to hit a risky home run. It's okay not to be the next Facebook or Twitter. Steady growth is often more sustainable and less risky.
So, if you want to grow your business or start a new one on the right foot, think about how you can make an existing idea better and provide more value. This way, you're more likely to achieve sustainable success. Remember, it's not always about being different, but about being better.
Quotes by Leila Hormozi
"A lot of advice is given entrepreneurs outside of context"
– Leila Hormozi
"What most people want is they want to take calculated risks and they actually would like more certainty"
– Leila Hormozi
"I don't think that you need to be a hundred percent different and be first to market to win"
– Leila Hormozi
"You don't need a unique product or service but you need to offer the customer more value than they get for the going rate of your competitors"
– Leila Hormozi
"Some of the best moves that we've ever made in business are just looking at what other people have done and then just doing it a little bit differently"
– Leila Hormozi
Full Transcript
what's up on this video today what i want to share with you is the worst advice i hear people give entrepreneurs who are looking to start a business i want to give context to this because i think that i'm giving this i am talking about this advice because it is advice that i heard in the beginning and that me and alex talked about and we didn't follow and i'm really glad we didn't follow it because i think a lot of advice is given entrepreneurs outside of context right i think that a lot of the traditional advice that we hear is actually geared towards people who are you know who have hit a 10 out of 10 home run what i mean is like the founders facebook of zappos of you know uh twitter like all of those kind of people and people were looking and interested in having those kinds of businesses and i think those are awesome businesses i don't look to start a business like that and we do not typically work with businesses like that because there's high risk high reward and i actually think that most of the time what most people want is they want to take calculated risks and they actually would like more certainty because usually when you're starting a business i think the majority of people um at least the people i've talked to you know they're looking for financial freedom time freedom purpose they're looking to do what they love to an extent and challenge themselves and have a way to grow and i don't think that in order to do that you have to you know become one of these unicorns out there and what i've noticed is just a ton of the advice that's out there is geared towards that kind of subset and so the first piece that um i hear a lot of people say when they're talking about what they want to start as a business but i don't think they realize it's not matching what they actually want is that they need to be first to market and the reason that this is so difficult and i don't advise anyone to try and be first to market most of the time is that being first to market in a completely new subset a completely new category is a very difficult task for somebody who's never run a business before because what you have to do is you don't just educate the buyer on your product you educate the buyer on the problem that causes them to even buy the product and a lot of people don't know how to do that an effective way you also don't have the resources most of the time especially if you're a you know bootstrapped company you don't have a ton of vc money or liquidity then it's very hard to do that and so if you have a ton of cash if you have a ton of liquidity if you've got investors you've got people who've built facebook and twitter and all those sure i think that maybe it makes sense if that's what you're going after and you are okay with the fact that there's a high likelihood of failure just given the nature of that business however if you're just looking for you know certainty and a base hit that's going to take you out of debt that's going to take your employees out of debt that's going to help your customers it's absolutely not necessary to be first to market and i can tell you that because you know i've had a taste of this in which we started allen our software company and even in that business we weren't even first to market in the category but in the subset of that category we were you know we were working leads with ai and that was different than what anyone else was doing and it was a pay-per-performance model which had never been brought to that market before and so what i noticed was it was really hard to educate the customer they didn't understand how the product worked they didn't understand how the billing work they understand why you do pay performance why isn't it flat rate why is it why is this better right and so there's so many different sales they have to overcome when you're first to market that you don't have if you're not first to market and so that is the first piece um i think that personally when i look at a business i think that a lot of times if you look at the market in terms of like competitors you know if you're 80 like a competitor and you just have 20 that's different that's enough to make your space that's enough to take your piece of the pie and i don't think that you need to be a hundred percent different and be first to market and can change you know completely create your own category in order to win i just don't think that's true and i actually don't think most people want that because it's just so much higher risk and volatility and if you've never run a business before then i i just don't know why you would start there so i don't know why people give that piece of advice um the second piece that kind of and these all have a theme to them you know as they go hand in hand is that you need a unique product or service and the truth is you don't need a unique product or service but you need to offer the customer more value than they get for the going rate of your competitors okay and so when you what you do in order to to do that right is there's three things that i see right one is you can pick a niche right because automatically you know if you look at niching down it's going to be more specialized which means you can increase price and increase value because you can be more specialized in terms of what you deliver the second piece is that you can restructure your offer if you would like to know how to restructure offer buy my husband's book hundred million dollar offers you can differentiate your entire business just by changing your offer you didn't even you don't need to change the product you need to change suppliers you don't need to change anything on the back end you can just reframe how you sell your product and then the last one is segmenting customers and packaging and so what i mean by that is if you can come into the market where everyone's selling a certain package right like say at a gym most gyms you know you go into a crossfit and they're like you know we're uh 99 a month and you get all the classes right it's pretty much most crossfits and you could come in and say we're going to segment our customers so we've got the elderly rate we've got the beginners rate we've got the intermediate rate and we have different packages for each of those people and so it's actually almost niching down or segmenting within that niche to get even more specific about what that customer needs and i think it's um marcos uh riviera that talked about uh how much packaging can increase your revenue um i think it was in total of like some companies it was 60 70 increase in revenue just by packaging things differently for different segments of your customer so if you were to look at who your best customers are create unique packages for them and then create you know unique packages for say the second and third tiers of customers that you have you can probably create more value through just specializing with a separate package and then the last piece is that um i hear this given a lot which is you should enter a market with little to no competition again i think that if you're going to do that what that relates back to is that you're probably one of the first to market or there's a reason that there's no market because people don't actually want it and i see that happen all the time where i've talked to people and i think you like get in your head you have like one hit of success and then you think oh like i'm gonna break out and like build this whole new market whole new thing um and then what you realize is that it people actually just don't find that valuable and it's been attempted to do to be done before and it's just not a good idea um i think in reality what you want to do is like i talked about the 80 20 you want to take the 20 and make that your special sauce and just change that and that's how you can compete in a market you just look at your competitors you see there's a couple different things right so you can look at where are they not keeping up with the consumer and then how can you deliver the product or service differently right and so you look at like uber with taxis and it's like taxis were you know they're only at the location and you can only get them by calling a number right so uber went they got an app you have an app that you can use to access people right imagine if taxis had just come out with an app i think about things like that and so it's like how do you deliver the product i think right now a lot of people do a lot of things through even just still facts and mail and all these things it's like how could you go into a even an antiquated market and you could revolutionize it by just changing 20 of how you deliver the product digitally right that's an easy one for a lot of people a lot of people are doing that nowadays but all in all i think that those three things are the worst pieces of advice that i've heard and i have never followed any of them and the time that i can think of that alex and i have even attempted to do that is we actually built um a gym crm and the gym crm cost us almost a million dollars and the entire thing was geared around the five courses of retention which we talked about that's how you retain customers in a gym facility and so we thought nobody's done this before nobody's built a crm that actually you know retains clients it also you know has upsells and such throughout the crm etc etc and we were about eight weeks away from launching it when we realized that nobody gave a about retention like the top of the top like the cream of the crop of gym owner's death but everybody else just wanted new sales and so we're like we built a product for ourselves and for a market that is tiny like the tip of my finger tiny and nobody else and so yeah we could be first market we could try to educate everyone and have this huge barrier to entry but we were like we're just not going to do that because we presented it to some of our clients in gym launch and they were just like i mean it's cool but like you know i'm not gonna really pay much for it like i'm more focused on sales and that's when we were like all right and so we actually threw that out and started allen which again was difficult because like i said we had the barrier to entry of educating people in the new market but it was not nearly as hard as trying to sell people something that they didn't even want and so i think that if you're looking at starting a business or even looking at your next product line take these things into consideration you know i think that some of the best moves that we've ever made in business are just looking at what other people have done and then just doing it a little bit differently like you don't even need to do it much differently look at what your strengths are and take your strengths and put them into that 20 and that's your special sauce and that's how you start a business and i think for most of us we don't want that facebook home run or that twitter home run i think most of us just want to do base hits over and over again and not get knocked in the face too much and so if you found that useful go ahead hit subscribe and there will be more on the next one