Wednesday, January 05, 2005

The Power of Thinking Small

(But in a Big Way)

Often, people will ask me in frustration, "How am I supposed to compete with WalMart (or insert the name of whatever huge national or multi-national retail chain here)? They're huge! I'm small. They've got buying power! I don't. Bla, bla, bla..."

I've heard it in so many different ways, and in so many variations, but it all comes down to the same thing. And it also comes down to the same answer.

You're right. You can't compete.

At least, you can't if you try and compete on their terms. Why? For the exact same reason that were spelled out in the first place. But if you compete on your own terms, it can still work, and work very well.

I recently came across an article in the newsletter of the "Just Plain Folks" website (a support site for independent songwriters). Even though it spoke directly to the music business, I'm finding more and more that it applies to all businesses. Let me share with you an excerpt or two:

"I have a notion that we're turning a corner (or experiencing a swing in the pendulum) where an artist who focuses on a smaller number of fans and serves them with a high level of direct interaction and communication will be the new model for success, even in the face of new technology and the shift in old school music business procedures. I think a new definition of success will be the artist who has 5000 passionate fans worldwide who spend 20-30 dollars a year on your creative output. You'll communicate with weblogs, supply them with regular unique songs and videos via digital files, share the details on the creation of and motivation behind your work on a regular basis, almost like you're a unique reality show for your fans. You will creatively serve them in a way that the 'industry' can't and/or won't.

"Rather than spending your time begging for recognition from the mass media or trying to reach critical mass numbers to get a 'deal' and make a living, you'll do the opposite of the competition and play 'small ball'. Earning 100-150K per year, while maintaining 100% control over your artistic vision and output is the way to do it in the future. Releasing music as it's made and not on some corporate schedule will free artists in a way we haven't seen in our lifetimes. Focusing only on those who get and appreciate what you do rather than spinning your wheels trying to appeal to the masses will make you far more artistically productive and will allow you to take more artistic risks and to grow far more quickly and deeply than our current system allows."

No matter what your product line, the same principle holds.

You see, I'm seeing two trends in business right now. A trend toward bigness, toward buy-everything-at-one-store hugeness. And I'm also seeing a trend toward smallness. Toward niche markets. Toward finding things that you can do well, even if it's to a smaller audience, and going after that audience with gusto. And, by finding that audience, you can grow big.

That doesn't mean it's going to be easy. Business was never easy. But it's not difficult, either. By that I mean, you'll have to work at it, but the work isn't hard.

Here's some guidelines:

ONE-Identify your passions. One thing that the big stores don't have is passion. How can they? They're so scattered they can't bring a focus on anything. It's tough to be passionate about EVERYTHING, right? So, pick something you love, something you're good at.

TWO-Identify your opportunities. The next step is to take it from interests and hobbies to the business world. Is there a demand? Can you find a source for the products? Can you offer them for a reasonable price?

THREE-Identify your audience. Selling is a two-way street, and you can't ignore that you need customers. If you don't know who you want to bring to your shop, you won't be able to invite them in. You have to know who they are, and where they are, and what other things they're interested in. Since you have some passion about whatever it is you're selling, it's likely that you, yourself, are in that audience, so you'll be able to relate to them.

FOUR-Serve your audience better than anyone else can. In the musical model above, it lists many ways that you can serve your customers, beyond just selling to them. Be informative, instructional. Blog. Keep them up to date on changes, not only in your business, but also in the whole industry. You are in a position to be their best friend in one area. Do you think WalMart is gonna do that?

And so it is, that by thinking small, or narrow, you can grow big.

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