A 100-watt lightbulb can brighten up a living room while a 100-watt laser can cut through solid steel.
The only difference is focus. Trying to be the best at everything is the fastest way to fail at everything.
We want to be everything to everyone because we are scared. If we don’t do everything then we are going to miss out on some great opportunity.
You don’t need to compete with the whole world even if you are online. Exactly the opposite is true. Competitive advantages are created by focusing on what you do best.
FOMO, thus, is not a business strategy. Creating a competitive advantage is a strategy.
In 1981 Jack Welch became the CEO of General Electric (GE). GE’s market value was $12 billion when he took over, and twenty years, when he retired, it was valued at over $400 billion. In 1999 Fortune named him the “Manager of the Century.”
His underlying strategy was to be number one or number two in all the industries that they competed in. Otherwise, they should quit that market. General Electric does everything from plane equipment to financial products.
Now the question is, how do you become number one in your business or industry when you are not a billion-dollar conglomerate.
You may not be able to be the best of everything to everyone in the entire world. So all you have to do is make your world smaller.
Make Your World Smaller
You can achieve this by doing two things. Narrowing your product offering and narrowing your locations. The two work hand in hand to make your world smaller.
If you have a traditional brick and mortar business, then your location is already narrowed down. You can only offer a service to those that can physically reach your business.
This narrow location is a good thing. You can do the same for your online store by only marketing or delivering to specific areas.
Let’s say you have a fast-food outlet in your small town. They may be 10 000 people in this town, and there may be a dozen other fast-food outlets.
Out of the 10 000 people in your town, perhaps half of them buy a meal from you every month. You are probably the 5th or 6th best fast-food outlet in your town. This means you sell 5 000 meals a month.
Instead of competing with a dozen other fast-food outlets, you can narrow your focus to become the best
You could only target senior citizens. They may make up 2 000 of the 10 000 people in your town.
You can do this by narrowing your product range.
Your menu may have many different items for all types of people. Instead, you can create a simplified menu with fewer things. These items should all be soft and high in fibre because that’s what pensioners are looking for.
Now you may not be the best for 10 000 people, but you can be the best for 2 000 people. Because you are the best place for senior citizens, you’ll find that they come to your store more often. Perhaps once a week because you have no competition in this smaller world you created.
With 2 000 patrons visiting you every week you’ll now sell 8 000 meals instead of 5 000. With a smaller product range and a smaller target market, you’ll reduce your costs. You’ll be selling more meals at higher margins.
Now that you the best in your world you can choose to expand your world. You could do this by building another store in the neighbouring town. You can continue doing this until you the best fast-food outlet for senior citizens in the country. Eventually, you’ll be selling 8 million meals a month across the country.
Compare this to being the 6th best in your town.
Even McDonalds started in one location where. They originally focused on quick turn arounds for customers in their town. Soon, they were the best fast-food outlet in San Bernardino. They were not the best restaurant in the world.
How Would You Compete With McDonald’s?
McDonald’s spends some $500 million a year on global advertising that covers three-quarters of the world.
Taking the 500 million and dividing it their target market of 5 billion, means they spend 10c per person every year. That’s less than 1c per person per month.
If you are only targeting the 10 000 people in your town, then you only need to spend more than $100 per month on advertising to beat McDonald’s.
If you are targeting only the 2 000 people over 60, then you only need to spend $20 to compete with McDonald’s in your town.
You may not be able to beat them in the world just yet, but you can easily beat them in your world right now.
It’s the Same Online
You may think that if you are online, you are competing with the world. This is precisely the thinking that causes most online businesses to fail.
Targeting over 7 billion people is an impossible task. Even Amazon started selling only books to limited locations. Twenty-five years later they the everything store to everyone in the world.
If you have an online product, service or store, you can follow the same method. You can focus all your advertising spend on a specific area or a niche market. There is no need to compete with the whole world right now.
You can also focus your product by simplifying it. Only offering one thing instead of trying to be everything to everyone.
A Great Example is Instagram
They originally started as Burbn. A complicated App that let you check-in to locations, make plans, earn points, and finally post a picture of that meet-up. Needless to say, it was unsuccessful; otherwise, you would be using it right now.
They decided to strip it down to one core function—a photo-sharing app only for iPhones. Three months later, they were the number one downloaded App and two years after they sold for a billion dollars.
If you want to be number one in the world, then you have to start by being number one in your world.