Dell for Entrepreneurs featured Underground Elephant’s CEO Jason Kulpa in an article titled, “The Ultimate Guide to Entering and Gaining Traction in New Markets”
It seems like everything Sir Richard Branson touches turns into gold.
He’s tackled everything from airlines to mobile phones to music. So in 1998, when he drove a tank through a wall of soda cans in Times Square symbolizing the war he was going to wage on the big soda companies with Virgin Cola, he seemed unstoppable.
But think about it. Have you ever heard of Virgin Cola?
Most likely not — in the past 15 years, it’s only cornered 1 percent of the U.S. soda market.
Red Bull, on the other hand, entered the same market in 1997. Fourteen years later, sales of Red Bull are growing by 35 percent per-year and all signs point to a profitable private company. It’s also branching out into new industries like music, with Red Bull Records producing AWOLNATION’s hit “Sail.”
So, what was the difference? Why did Red Bull, a private company run by a little-known Austrian entrepreneur, succeed where the mighty Branson could not? More importantly, what can your business learn from the mistakes of Virgin Cola and the success of Red Bull?
There are six things to think about when your brand is looking to spread its wings; luckily, no tanks are required.
1. Work with Disruption
As the wave of digital disruption accelerates, is your business strategically positioned to take on emerging opportunities inside and outside your current market?
One example of this is in education. With the proliferation of cheap online tools, educational options are rapidly expanding. Students are no longer confined to brick-and-mortar schools. They can now access education through online trade schools, specialized programs, apprenticeships, and more.
What’s changed in the past five years? What’s not being tapped into yet in your current market or the one you’d like to attack? Start looking for opportunities and you’ll be surprised at how many you find.
2. Leverage Modern Multichannel Marketing
Are you using digital marketing to share your brand across the channels your customers use?
With the growth of these educational opportunities, there are also new ways to reach prospective students. No more direct-mailing course catalogs or endless hours at dozens of college fairs.
Now, using channels like Google and social media, innovative educational companies can find leads to prospective students through the social channels students are already using.
3. Embrace the Unknown
Is your company structured to pivot when markets, trends, or customers require you to innovate – even if you didn’t plan to? Your competition may waver, but if you’re nimble and resilient, you’ll be able to capture opportunities they never saw coming.
Last year, providing a SaaS product was the last thing on our minds at my company. Our programming was all done in-house and we used it to solve internal problems, not ones we saw outside the company. But when we realized how fragmented the lead generation market was for insurance companies, it suddenly made sense to work with our new partners at Allstate to create a SaaS platform. If we hadn’t been prepared to reach outside of our core services, we would have missed a golden opportunity. And, more importantly, someone else would have snatched it up.
4. Go Back to Basics
When was the last time you performed a SWOT analysis? Have you ever?
It’s business 101, but pulling away from the day-to-day work and rethinking your big-picture strategy will help you position your company to navigate digital disruption and prepare you to see possibilities you would otherwise overlook.
For example, at my company, our north star is linking high-intent customers to the services they want as efficiently as possible. With this as our guiding principle, the move to creating a SaaS platform was a no-brainer. Even though it wasn’t our normal market or solution, it accomplished the end goal of bringing leads and services together.
5. Pay Attention to Shared Challenges — and Value
Chances are you’re developing some internal tools to navigate digital disruption. But you aren’t the only company facing these challenges, so how can you retool some of your solutions to help other businesses and add more to your bottom line?
One example of shared value is the recent acquisition of Beats Electronics by Apple. At first glance, it might seem like an odd deal since Apple is perfectly capable of making its own headphones. However, the creator of the iPod showed special interest in the Beats streaming music services – an area that Apple has struggled to compete in. By combining forces both companies were able to bolster their bottom line and bring new services to their customers.
6. Have Great Partners
The last piece of the puzzle is great partnerships. Consider what big brands you can work with in your current industry. You’ll gain credibility by association, making it easier to expand to new territory when you get the chance.
For example, our partnerships with the Art Institutes and Kaplan paved the way for partnerships with bigger companies like Allstate. The importance of building trust can’t be overstated. If you don’t make a habit of delivering for your current partners, you’ll never be able to expand and become another constantly pivoting startup flailing around for focus. However, if you build a good reputation, it will follow you across other industries.
Entering new markets doesn’t have to be difficult, but it does take some thought and strategy. Solid business logic and partnerships will pave the way for your company to expand and grow in exciting ways. And, of course, a tank might not hurt either.
Photo Credit: Nicolas Raymond, Flickr.