- Create a never-before seen product.
- Improve features in current software.
- Focus on a unique selling proposition, rather than create new.
Unfortunately, the answers are not easy – but here’s some pros and cons:
1-Do brand new: (think Winamp, Napster, Email, Internet). Brand new has the power to get big – REALLY big. If it’s something people want (or like email, didn’t realize they wanted till they got it), then it has the potential to be huge – the ‘next big thing’.
One caveat – making money being first isn’t easy. Of the ones mentioned, the creators of the email and the Internet have no great related success to speak of, and Napster went downhill fast – only Winamp had success (sold to Netscape/AOL). So for a small company, it may be an uphill battle.
2-Improve current software: Now we get to more common products – Napster is gone, but there are many popular peer to peer replacements. Windows started as an improved DOS, which started as an improved CP/M; Linux an improved Minix; and so on.
The potential here is to get long-term benefits by seeing what the first person did wrong, and improving on it. In effect, you benefit from their scrapes on the ‘bleeding edge’.
The downside? Everyone else is thinking the same thing, so there’s competition. As well, if the first-runner is savvy, they can use patents and other intellectual property to close off competition, making being number two difficult in more ways than just trying to gain market share.
3-Forget new – just different. Here is the majority in the world – just focus on the USP (unique selling proposition), and make sales that way.
Turn on any Television, and you’ll see this group almost exclusively. Whether that means the average television viewer wants comfortable rather than innovative, you decided: but it is the most common way to sell, for obvious reasons – everyone can compete, the barriers to entry are lower, and the potential, while small, can be better.
People will tell you that a small loyal market can be potentially much more lucrative than an wider, but indifferent market. Look at Macintosh computers – that loyalty translates into a higher overall cost for products, willingly paid. Ditto for Linux – if time really was money, each Linux box would be priced at hundreds (perhaps thousands) of dollars – all gladly paid for instead in elbow grease.
And while Windows currently has the market share, there is little or no loyalty, which means that if something better came along, Microsoft could go from top to bottom in very little time (witness IBM in business equipment since the 80s).
So to answer the original question – it depends. Each product placement has positives and negatives, depending on your focus (ie your business direction). Determining what you want out of the business, as well as what you can comfortably provide in terms of skills and resources, may well help decide what direction to eventually go in.
