The two competitive trade-offs startups should consider


The first step into the market is always a risk for any startup. Startups usually face a really hard time while deciding where to start and therefore choose the first sound action plan and just roll with it. However, it is important to think this process through and choose the most suitable go-to market strategy. In a research called ‘Do Entrepreneurs Need a Strategy‘, HBR provides a starting point for the startups by giving them two options that could help them narrow down the spectrum.

Collaborate or compete?

The first one allows you to decide whether you want to team up with other players that are already out there or you want to get a market share on your own. Both of these strategies have their upsides and downsides. When you collaborate with large organizations, you are able to get to a better-established market quicker. The downside of this strategy is equally potent and risky, as your startup has to match with the slow pace of the large organization and in the end you only get a small share of what could be bigger if you were to experiment on your own.

On the other hand, when you are out to compete with large organizations that have more resources and exposure, it becomes very difficult to get to a stage where you can really get your product the market share it deserves. However, if you approach this strategy with a well thought out plan, chances are that you get to serve the customer segments that the large organizations might have missed. You also get to experiment more with your strategy, which means you build, measure and learn faster than other organizations.

Build a moat or storm a hill?

This couple of strategies can influence your growth and effectiveness in the market to a great extent. The first one suggests that your first investment is going to be on protecting your intellectual property. Although, it will allow you to keep any competitors from taking charge, it has the tendency to limit you from exploring different customer segments and partnerships.

The alternative has a huge scope for iterations and commercialization. You can keep on testing the product in the market and then come back to making it better and more suitable for various target markets. This process, however, has to be expeditious as you are always going to be threatened by potential competitors.

While your go-to market strategy needs much more work before you take your product for a test run, these strategies can help you work in a more organized way and make sure that your bases are covered.

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