Sometimes it's okay to have a copycat company. The trick is in finding the differentiator that sets you apart.
It’s no secret that great business ideas are often generated from other very similar ideas. But like any start-up, a “me too” company needs to avoid being steamrolled by better-capitalized, better-connected competitors. For that, you need the “me too plus plus.”
A me too plus plus company does something other entrenched players also do, but does it in a way that provides 2 distinct competitive edges in a particular niche. "Because the barriers to entry are so low now for launching new products, you can't have just one more feature than your competition," says Sheldon Grizzle, founder of Chattanooga, Tenn.-based business incubator Co.Lab. "You need to have two or more major differentiators that make you truly unique."
Supply Hog runs a web site where you can purchase endless building materials, from roofing supplies to fencing. Sound familiar? Given the dominance of Home Depot and Lowes, this doesn’t sound terribly promising. But Supply Hog thinks it can win some market share with its “plus plus” differentiators, such as:
An intuitive, clean, online-only sales tool, allowing Supply Hog to cater to contractors who don’t have time to drive to a big box store for supplies.
Free shipping, which is especially appealing to clients who have to get supplies to multiple building sites.
A proprietary back-end system that dynamically compares prices from dozens of suppliers and only shows the client the cheapest one.
With simplicity, free shipping, and lowest-on-the-market prices, Supply Hog’s “plus plus” differentiators are allowing them to carve a chunk of business away from the building supply giants that appear to be doing the exact same thing--getting people the building supplies they need.
InternMatch is another company that has found their “plus plus.” InternMatch sets itself apart from other job boards by targeting a particular niche of students. They focus on those not quite desperate for work, but very hungry for real-life experience. Their “plus plus” is that they also serve as a resource for employers. Companies such as CBS, Pixar, and Salesforce use InternMatch’s Campus Hub to showcase their culture, employees, and offices online, and lets students track their profile. “This level of differentiation is what it takes to hang with players like Monster and Career Builder,” says founder and CMO Nathan Parcells.
Don’t be defensive about being a me too plus plus. When you’re meeting with investors or customers, they key is to clearly communicate the edge the “plus plus” gives you over competitors. When explaining your venture, compare it to what’s already out there. Put it all out on the table. You’ve got nothing to hide as long as you’re prepared to say, “Yes, this may sound just like that, but here’s the edge my business offers. Here’s what makes it different.” Be confident in at least two meaningful differentiators that cater to a very specific niche of customers. That’s the “plus plus.” That’s the game changer.
BENJAMIN WALD is a successful technology entrepreneur and investor. Ben’s passion for social impact, software and education support his ambition to change the world through technology. He is now the Managing Partner of Spartan Systems.