One of the toughest moments in business is when your product suddenly becomes uncompetitive and it’s too late or unprofitable to make your product competitive. This scenario is very common, but it’s hardly talked about. The easy solution is to shut down the product and accept defeat. In a mono product company, this can mean major job and financial loss. People talk about businesses like they are just an entity. Businesses are entities that are responsible for the comfort of several families connected to them, so when a business dies, families suffer until the breadwinner finds a new job. Shareholders invest with plans to give their holdings as inheritance to their loved ones or sell in the future to live their dream life. Imagine the pain of such a business dying. This is why companies have to creatively and intentionally find smart ways to thrive in tough moments when their product becomes uncompetitive.
It doesn’t matter why the product became uncompetitive. If you’re unable to make it competitive because of cost or profitability, you have to focus on milking the best of the product while you research the new product customers want. Many people focus on the “why”. Even the most innovative company can get caught unaware by a new entrant with a better technology or crazy low pricing. These steps will help you thrive with an uncompetitive product.
You have limited company resources, so it’s important to focus on realistic expectations. The new entrant can’t own the entire market overnight. You need to study the entire market scene and find where you can still play and how long you have to play before the entrant expands. For example, a new social media company with better offering will get young people first before they win the hearts of older people. A former market leader in that space battling tight competition from a competitor with a better product will be smart to learn ways to serve the older generation better while they work on a better product. Maintaining a part of the market that can still buy from you is important to keep revenue and profit. In some cases, it’s focusing on distant areas your competitor with a better offer can’t reach yet because they are still enjoying the bubble of success. You need to keep the engine running. Realistic expectation is key.
In one case, I know a business lost 80% of their market share, nearly overnight. They never saw it coming. It’s impossible to keep the burdens that you had when you made cheap billions. You have to keep only the team that can serve these realistic goals you have set and another team that’s working on making products customers love. Exits can be painful, so it’s important to be kind and generous. You also have to keep the door open. The teams that have to go may return quickly when the business is green again. Loans and lease agreements can be renegotiated using your current realities. Be bold to make the important decisions, so hard life doesn’t make the decisions for you and everyone goes home and the business ends.
Be The Best At What You Can Control
You may be unable to control or respond to price and new technology instantly. In one case, a better product was introduced to the market, and it was 60% cheaper. However, while you focus on demographics and regions that will still buy from you, offer unmatched customer service. The part of the business you can control, let no other business or competitor give more value than you. In some cases, customers have cheaper options but pick a more expensive option because they love how they were made to feel as a result of excellent customer service. A company enjoying success makes a lot of mistakes and offends a lot of customers. You can’t afford to offend any customer. Let the customer remember you as their happy place. Offer unmatched customer service consistently. Celebrate the customer and make them feel like your only customer - your priceless jewel.
Make What Customers Want
You have experienced the pain of being the company with an inferior or overpriced product, and this happened overnight. The outcome was overnight, but your competitions spent years working on the products customers love. It’s not time for vengeance. It’s time to study the customers. Learn from their behavior, pain, and aspirations. Lead your team to create the solution and ensure your product is scalable. Make your solutions so good that it’s so hard to duplicate. Cheap solutions are easy to duplicate. If the solution is the work on intensive work and creativity, it will be near impossible to copy. The iPhone is an open book. Anyone can buy and copy external parts of it, but the philosophy that births the product is hard to copy. The philosophy focuses on making easy to use products that customers love and perceive as premium. Cheap solutions aren’t that deep. They can be easily copied. Focus on a real problem and make a product your customers will love.