Blue Ocean Strategy

Why Smart Entrepreneurs Choose Killer Ideas
to Start Booming Businesses

By Robert John Stevens, CEO of WriteExpress Corporation

If you're not familiar with the books Boom Start: Super Laws of Successful Entrepreneurs and Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant, I want to share some of their insights.

A Blue Ocean Product is a product in a unique category that dominates a situation. If people want a Blue Ocean Product they must buy it from the leader because there are no relevant competitors. Blue Ocean Products often enjoy high profit margins for a very long time.

Start-up Millenniata picked a winner for their Blue Ocean Product
Did you know that your data, digital photos, and home movies are not safe? CDs and DVDs can start losing data after just months, and especially after a decade? Millenniata invented the ultimate solution—a DVD player that reads and writes DVDs that may last more than 1,000 years. If you want to buy one, you have to buy it from Millenniata or their resellers because there are no competitors.

Decision makers notify each other about Blue Ocean Products
Millenniata's technology is so hot that archive, government, military and corporate executives phone their friends to tell them about it.

The biggest mistake most entrepreneurs make
Not realizing the power of a Blue Ocean Strategy, entrepreneurs often make the mistake of building their startup based on a Red Ocean Product—a product in a market with plenty of competitors: A techie learns about a booming product, tries it, and feels he or she can create a better one—usually by improving on a few features. This is usually a recipe for disaster. Odds are that a start-up based on a Red Ocean Product will get beaten up. Red Oceans are bloody. If your start-up wants to compete in a Red Ocean, you will get hurt.

Let big corporations compete in Red Oceans
The ultimate example is Microsoft entering the well-established, multi-billion-dollar gaming industry with Xbox. They could withstand loses on every sale, but had the resources to gain traction.

Sometimes there is room for 2nd, 3rd and even 4th place Red Ocean Products, especially if the market is large enough. Avis capitalizes on not being the leader. Their tagline "We try harder" successfully promotes their #2 market position. But unless competing companies have huge resources to expend, often they all fight for a small slice of the market.

If you have a Red Ocean Idea, it is better to sharpen your business angle to create a Blue Ocean Product or Service by narrowing your focus or sharpening your business angle.

For example, if you had enough genius scientists to compete with Millenniata, you may offer 1,000-year disk storage specifically for libraries.

Why compete when you can create augmented products?
Boom Start authors tell us that Blue Ocean Products can quickly create a profitable aftermarket of augmented products. For example, why not buy a 1,000-year vault for your Millenniata DVDs? Whether or not Millenniata has the resources to focus on augmented products, it may be wise for them to invest in, empower or promote startups that can.

Blue Ocean Products attract horses
One Boom Start Super Law is to Ride Horses. Horses are defined as well-known, influential people in their industry that people follow. Two of the most successful horses in America are probably Oprah and Marie Osmond. If Oprah invites you to demonstrate your product on her TV show, your sales will probably explode.

It is difficult for Red Ocean Companies to attract a horse to promote their product because horses do not promote "me too" products, at least not for free. Nike paid Michael Jordan more than 15 million to promote their athletic footwear (a Red Ocean Market) and the return on investment was in the billions.

Unfortunately, startups rarely have the funds to attract high-paid horses.

Customers feel safe going with the market leader
They feel unsure about buying clones or look-a-likes.

Many successful startups built on a Blue Ocean Product wonder why their sales decline as they spend years creating nothing but Red Ocean Products.

Sometimes Blue Ocean Products are so successful that most people can't name the competitors. For example, can you name the competitors of Apple's iTunes, iPod or iPhone?

Why spend money on traditional marketing when you can create events with blue ocean products?
Create low-budget marketing events attract the news media. These events are 600-800% more effective than traditional advertising. Smart entrepreneurial marketers spend $1 only if it makes $2.

Blue Ocean Strategy

Why Smart Entrepreneurs Choose Killer Ideasto Start Booming Businesses

Why Smart Entrepreneurs Choose Killer Ideas
to Start Booming Businesses