David vs. Goliath?

[TadMoore]

I’ve been re-searching a product for a couple weeks now. There are a few competitors here and there, and I was thinking, “hey there might be something here.†BAMN! GOLIATH!

Another company in a different industry is doing it. They have added this product and service onto their existing service, and rebranded their company in February. The product is awesome, I would call it the ipod of this market. So I got depressed and started back on my search for a different fast lane.

On a whim, I went back to Goliath’s site and started pocking around. Found a reference to another company in small print. WOW! They are just branding and selling this product they did not develop or manufacture it. I found the company supplying Goliath, contacted them and this company will sell me re-branded units, and another company will provide the monthly service. I could start doing this overnight, with limited resistance.

What about Goliath? They have some huge advantages:

Advantages:

1. Head start. They launched this product in “Feb†of this year.
2. Nice branding, probably spent a million dollars on branding. Everything is perfect awesome video’s, testimonies, the works.
3. They are highly aggressive, employing door to door sales tactics.
4. They are national, they have an office in my city. (I have honestly never heard about them)
5. They just received 500 million in venture capital funding. They are going to employ a business model similar to the cell phone industry.
6. They brag about just signing their one millionth customer.
7. They got all the credit with awesome reviews and awards for the product.

Disadvantages:

1. They re-branded as a new company partly because their old brand was damaged. They have 100’s of posts written about them for their old company on Ripoff.com. People complaining about aggressive sales people coming to the door, being over charged, signing tricky contracts for 39 months. This new company is starting to get bad feedback as well, but I think they are trying to control it better.

Opportunity? They are going main stream. They have not touched small business owners, or worked any deals to include this product bundled in another company’s product. They have not signed deals to sell this product at Costco, or any major retailers. I could maybe come in with “no contracts†and start pushing service, but that feels weak.

This product could be sold to anyone who owns a home, condo, business. So the market is huge. I have been beating my head against the desk trying to decide.

All in, or Fold?

 

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[MJ DeMarco]

They just received 500 million in venture capital funding.

Your advantage here is that their loyalty is to their investors, not to their customers. Their business decisions will probably be skewed to keep investors happy, not customers. (See my video on Stakeholders.)

Why Netflix and Bank of America Pisses You Off And What Valuable Lessons You Can Learn from It!

Goliath also moves slower. Be quicker.

Also, being "not the big guy" is also a good marketing angle. Lots of people would rather do business with a small mom-n-pop, versus the big corporate conglomerate. There is a lot of anti-corporate sentiment going on.

Obviously, not knowing the product I can't say if you should go all-in or fold. Just some thoughts off the top of my mind...

 

[SuccessInMind]

If it's a solid product that people need and you are willing to put in the time, energy, and resources to make sure that your customers are satisfied, I say go all in. Try selling it to people around you first to build a reputation and grow your business and aim to secure contracts with major retailers before Goliath does. If you have an NDA, I'll be happy to sign it and give some more insight if that might help your decision. It sounds very interesting!

 

[Rickson9]

Getting customers will make the decision easier.

 

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[TadMoore]

Thanks everyone for those responses.

I have been exploring the cell phone industry and trying to understand if I have an angle against Goliath.

Up here in Canada we have 3 carriers. Bell, Telus, Rogers. All of them carry the iPhone, but all of them market it differently.

Bell - Service
Telus - Best Coverage
Rogers - We love young people. If your 14 and have a job, here have a phone

What makes that work? Is it just the pure volume of people needing a cell phone? Telus has terrible, terrible, terrible service, and yet they are probably the largest. I genuinely believe these companies haven't figured it out either, 5 years ago every carrier had their own unique branded phone. Now everyone wants the iPhone, what makes them special now?

I have been following this thread as well, trying to figure it out.

https://www.thefastlaneforum.com/fa...99-stop-move-take-competition.html#post183501

I guess what it comes down to is what happens if your not different, better, etc. Are you just another...