If you have an idea for a start-up, it will more than likely be based on the notion of creating something that serves an existing market, but does it a bit better than anyone else, or with some added extra – a unique value proposition – that nobody else matches. But even if it is a great idea, it is not sure to thrive.
The reason for this is both simple and harsh. While you may have come up with something a little different, you will still be trying to disrupt an existing market. That means you will be attempting to draw customers away from products or brands that they are already buying and are loyal to.
While a very good product may make some headway in luring away new customers, or successfully competing with them for new customers, you will nonetheless be rowing against the tide.
An alternative lies in new market creation. This is not just about you serving a market you haven’t previously touched, but developing a new kind of product that offers something entirely novel.
The tech sector is an obvious arena for this kind of innovation. Once there was no demand for PCs, because there were no such things. Nor was there demand for mobile phones or internet provision. But because these devices and technological developments emerged, suddenly there was a place for them and those who were quickest into the new market had first mover advantages.
What this means is you need a strategy that is somewhat different to trying to disrupt existing markets. Instead of trying to attract people by showing why your product is better, you need to offer wider education about what it is and how it will benefit people. This is what happened with the world-wide web in the 1990s – people had to learn what it could be used for and how to access it.
The Blue Ocean Strategy is the means by which you may best access new market spaces. As the name suggests, you will be entering a place resembling a vast, empty stretch of sea, where you don’t have to dodge or do battle with other vessels trying to sail in the same space as you.
Indeed, were you to offer a product like cruises to a great destination nobody had previously considered a good place to go on holiday, this could actually be a literal example!
The key is that you get to create the rules of the new marketplace. Any competitors that emerge will have to try to copy and improve on what you do.
In some cases, such as patents, the competition might be locked out. A good example was Polaroid, which was first to come up with instant photography. Eventually this market declined and the company folded, while now we have smartphones to meet this need. But in its time it was unique.
Not every company does this. For instance, in 1996 the English cheese maker Wensleydale was the first to come up with the idea of embedding cranberries in cheese, but did not patent the idea, meaning others have copied it.
Nonetheless, Wensleydale’s product is highly successful, showing that creating a new market can still be a route to success as wide as any blue ocean.