Day 2: Know the Ropes – Check Out Your Market and Competition
“You can’t succeed as an entrepreneur if you don’t know what the business world is about.”
A good business changes and adapts quickly to its surroundings in order to move forward, like a monkey swinging through the trees. But that monkey is going to end up as panther-meat unless it knows the vines in the jungle like the hairs on the back of its hand.
You need to know the ropes for your business too – or you’ll end up falling instead of swinging. The good news is that, unlike a monkey, you can read the following module.
It will guide you through the business jungle and, by the end, you’ll be flying forward, confident in the direction of your business.
Why it’s Important to Know the Ropes?
“I’m really not a huge researcher, but you are definitely going to want to know the basics.”
Knowledge is a good thing. Here are three reasons you need to look into your market:
- To see if your idea is worth your time.
- To find out how the industry works.
- To discover your competition and potential mentors.
Check out Your Market and Competition
“The first thing somebody needs to do when they come up with an entrepreneurial idea is question why it hasn’t been done before.”
It’s tempting to jump right in with your business, but that’s like entering an obstacle course blindfolded. Here’s how to get a better grasp of your surroundings.
Google Your Idea
We live in an amazing time. The internet enables you to scan the entire world for traces of your idea. It only takes a few minutes to type in some keywords and then scan the results for useful information. It’s fun too: look for interesting tidbits and discoveries that get your creative juices flowing.
Wikipedia is also a great resource.
When Lauren Amarante first got the idea for World Entrepreneurship Day, she immediately searched online to see if someone else had already done it. She was “thrilled to discover that there wasn’t already one,” and – just like that – World Entrepreneurship Day was born.
Write down the words you searched for when trying to find people who are doing your idea. These will be the keywords you will use when making your website to get search engine traffic.
Phone Books aren’t Useless
If your business is focused on the local market, then a phone book is a surprisingly great resource. All of your competitors are likely grouped in one section. In a matter of minutes, you can get all of their contact information, learn about their business models, and see the language that they use in their ads to lure customers.
If you have a lawn maintenance service (like Emil Motycka) and you’re looking to expand it, then a phone book provides a comprehensive list of your competitors. Feel free to give them a call or pay them a visit: you’re sure to learn something about the local market.
Finding Competitors is Good
There wouldn’t be competitors if there was nothing to compete over. Competition means that people are paying for the solution that you’re going to offer. Of course, you’re also going to have to do something to set yourself apart from that competition.
When Catherine Cook and her brother started myYearbook.com in 2005, they were just high school kids. They couldn’t have had bigger competition: MySpace and Facebook. But big competition also means a big market – and today myYearbook.com has over 20 million subscribers.
Learn from What They’re Doing
- How did they get started?
- How are they attracting customers? Who is their target market?
- How much are they charging?
- How is their product or service similar to what you want to do? Different?
- How do they use their website to capture sales leads?
Here’s what Catherine Cook had to say about learning from Facebook: “If your competitor is a big player, you need to pay attention to what they’re doing and learn from it. Otherwise, you’re going into the market blind.”
Not Having Competitors is Also Good
If you can’t find any competition, then that means your idea could just be the next big thing. By jumping into a new market, you have the first-mover advantage and any future competitors will have to grab onto your coattails just to keep up.
Philip Hartman is the 15-year-old inventor of the Steam Tech, a device that emits steam onto a car’s windshield so as to defrost it in just seconds. The technology is so innovative that Philip has no direct competition, but he emphasized to us that, “you really need to prove the concept first.”
More Due Diligence on Your Industry
Going through the steps above will be sufficient for getting you started. But if you want to have an even higher chance of success (and don’t mind putting in a little extra work), you can do these two things:
- Find out the NAICS and SICS codes for your industry so you’ll be able to research more statistics about the past, present, and future outlook of your market. You can do that here.
- Once you know the codes, you can look up stats about your industry at Ibisworld or Hoovers (might need a subscription to use these sites).
Be wary. Maybe your idea has no competition because there’s no market for it. At this stage, it’s a good idea to give your idea a once-over to make sure that it has a solid chance to succeed. Ask a mentor with a background in business or look at other companies that are offering something similar.
Find Your Mentors
“Most students, myself included, have a clouded vision of the world. Certain mentors can just open it up and show you something completely different.”
Mentors are people who’ve been there and done that. They’ve already made business mistakes so that you don’t have to.
Look for Experts in Your Field
When you were checking out your competition, you probably caught the names of a few heavy-hitters in your field. See if you can find interviews with them online, or just grab their email address from the contact page of their website.
Adam Toren, one of the founders of YoungEntrepreneur.com, is an expert in our field. Luckily for us, he’s also a nice guy who’s very generous with his time and advice. He’s been a great resource as we’ve sought to bring JuniorBiz and ‘What it Takes to Make More Money than Your Parents’ to a bigger audience.
How to Contact Them and Set up Meeting
It’s time to send an email to your mentor-to-be and ask to schedule a 20 minute chat. Not everybody is going to respond to your email, but you’ll be surprised by how many big shots are eager to help upstart entrepreneurs like you.
Offer to Help Them for Free or Buy Them Lunch
It’s easier to get some face-time with a mentor when you approach them in a certain way. Try offering your skills as a web designer, writer, or errand-runner. They’ll probably be happy to take your assistance. Otherwise, you can always just offer to take them out to lunch. Everybody eats – and it’s a cheap way to make a very valuable connection.
20-year-old Marshall Haas emailed AJ Vaynerchuk of VaynerMedia and asked him if he’d sit down for lunch in New York City. The only problem: Marshall lives in Dallas. Marshall flew all the way out to the big apple to build a relationship with AJ and it paid off: VaynerMedia offered Marshall a hard-to-come-by internship.
You may feel like a nuisance when you ask for help, but don’t project that in your communication with a potential mentor. Think of yourself as an engaging, up-and-comer who presents a great opportunity for the mentor to help out – and your mentor will likely think of you in the same light.
Knowing how to know the ropes is a good start, but none of this is going to matter unless you take action. Here are two things you need to do before next week:
See you at the top,
Nick Tart & Nick Scheidies
P.S. This module is just one part of a ten step outline to business success. Use it to launch your product, service, internet business, or something nobody else has thought of yet. The next module will show you how to plan your road to success – but the only way to get it is to subscribe to the guide. It’s an investment in your business and it’s absolutely free. Learn more and sign-up here!
P.P.S. Since we’re giving you this course for free, we just ask that you “Like” it, “Tweet” it, and otherwise share it with everyone you know. Thanks!