A common mistake most entrepreneurs make is misreading competitive advantage for a business plan. As any failed product / company’s review will quickly reveal, the primary reason for not making it was because of some else’s competitive edge that edged everyone else out eventually. For a start-up seeking to blow away and impress potential investors, a viable or sustainable business advantage or competitive edge is what shines through.
The edge or advantage for any start-up is actually or should be an ‘unfair’ one. To put it mildly. No amount of great thinking or precognition, market study, leadership teams and even money can outlive and outperform a focused and rightly construed sustainable business advantage—also referred to as USP or UVP earlier—if it is optimally aligned with the operations and roll-out of the start-up.
It is important to therefore understand unambiguously what it is that constitutes a competitive edge. Let’s start by spelling out what the edge is NOT. It is not just patents, or teams or cost advantages or price points or even dedication and hard work and features and so on. The sustainable competitive edge may be a sum of a bit all these but in its truest and most effective form, the edge is a bit m ore and whole lot different that these parameters.
The primary constituent of a business advantage is a barrier to emulation. Creating a business where the learnings are positively fed into the customer service and product improvement is something that no one else could just get up and replicate. The core competency or focus on the single major differentiator that you have will also stand you in good stead once your company enters the competitive minefield. It is important to determine and delineate this core focus and make it the life blood and the spine of your business across time.
Any start-up will necessarily have to identify a need-service gap a priori. The core business advantage that emanates thus is both of a viable and a profitable nature. Existing barriers to entry quickly disappear and new ones are erected to forestall impending competition. A successful business will, in all likelihood, be one which creates a disruption in the existing market-customer continuum by simultaneously identifying and bridging the opportunity the gap presents. A competitive edge is, therefore, in this case, the addressing of the market gap, providing a attractive solution than anyone else and thereby creating a new addressable market for today and for the long term.
One of the great things about competitive edge discovery is that people who are part of your network also invariably contribute to the permanence of this edge and advantage. With a focused idea and a learning curve to boot, your set of followers and endorsers is also an earned intellectual prowess that provides a formidable entry barrier to anyone with larger and better access to funds and people. This brings us to one of the key ingredients of the viability elixir: The ‘A’ Team. Your team with its varied skills, networks, insights and bonding is easily more than the sum of each of its constituent parts and is also a factor that cannot be duplicated and bettered easily.
The start-ups’ business edge has to broad-based, measurable, sustainable and real. Remember, this advantage will work only if cannot be copes easily and you are able to stick to it over the long term. A wary eye on the external environment such as the market, government and societal tastes and preferences also help provide your competitive edge with a keen finish that would help you harvest the hearts and minds of not only your target investors but also your customers and partners.