There has never been better time to be a company in tech. There are seemingly endless opportunities to solve real problems in innovative ways.
At the same time, competition is fierce. We no longer live in a world where building great products is enough to get you customers. You have to go out and strategically capture market share.
Luckily, for startups and large companies alike, it’s not a zero-sum game. For those who know how to seize it, the opportunities to grow market share are endless.
But what is the formula for companies to gain meaningful market share in a highly competitive tech landscape?
As the COO (and former CMO) of Porch.com, I’ve experienced first-hand what it’s like to start to build from the ground up. Here are four factors I have doubled down on to help establish and grow our market share — and which any startup or large company can use to grow their base.
1. Data
Becoming a data-driven organization is table stakes in today’s digital world. Companies are using data to create addictive products and highly unique experiences for users. It’s become the epicenter of strategy.
The most innovative companies are the ones that are great at capturing their own unique data and interpreting it accurately for the benefit of their companies.
How can companies leverage data to gain market share?
I’m a firm believer that if you want to build a unique and enduring product, you need to build it with something that no one else has. Unique and proprietary data is a critical part of that equation.
One way companies can do this is to invest heavily in developing their internal data analytics platform. Once you have granular access to your own data, you know what makes your company tick, and you can develop products that people never knew they couldn’t live without.
2. Distribution
With a marketplace business, it’s imperative you generate the flywheel effect with your product. You need supply to have demand, and vice versa. It’s a virtuous cycle. Zenefits’ David Sacks drew an excellent depiction of Uber’s flywheel in a tweet stating, “Geographic density is the new network effect.”
Uber's virtuous cycle. Geographic density is the new network effect. pic.twitter.com/NpmUnZgVfH — David Sacks (@DavidSacks) June 7, 2014
How can companies leverage distribution to gain market share?
For marketplaces like Uber, Airbnb and others, geographic density leads to better Distribution, fueling the flywheel. But winning at distribution is essentially just giving your target market better access to your product than competitors in the space are able to provide.
To lock up market share, companies not only need to give customers geographic access, but also strive to lock up mind share through content marketing, PR and strategic partnerships.
3. Disruption
Coming up with a disruptive business is hard to predict and even harder to pull off. You have to create something that doesn’t exist and pioneer a new market.
Aaron Levie, CEO of Box, said it well on Twitter:
Sizing the market for a disruptor based on an incumbent's market is like sizing the car industry off how many horses there were in 1910. — Aaron Levie (@levie) June 8, 2014
With disruptive business ideas, it’s difficult to truly grasp how big an opportunity might be until it’s executed.
How can companies be disruptive?
It’s easier said than done. However unpredictable disruption might be, companies can aim to gain new market share by bringing improved technologies to market and better serving existing customers, thus creating new markets.
That’s exactly what Netflix has done and continues to do in the movie rental space. It disrupted the market by better serving customers through its in-mail DVD rentals and disrupted again with its online streaming services. At the time, the company created a competitive advantage through innovative distribution channels, and it was highly disruptive because of it.
4. Dedication
Dedication is where your customers come in. Today you have to be willing to do anything and everything for customers — they expect it. Many dot-coms have failed to gain market share not because they couldn’t achieve customer awareness, but because they couldn’t capture customer loyalty.
How can companies use dedication to gain market share?
Several companies have decided not to pick margins as the thing that grows their business but instead they focus on customers. Take Amazon, for instance. It’s a company that’s succeeded for many reasons — but a big reason is that it decided its long game would be dedicated to the people it was serving. Amazon CEO Jeff Bezos was customer-obsessed from the beginning, and to this day he continues to take a customer-first approach to building his company.
It doesn’t matter if you’re a startup working from a basement or a Fortune 500 corporation — technology is leveling the playing field for companies to be disruptive.
By harnessing the power of data, optimizing distribution channels, and, above all, being truly dedicated to customers, companies are able to win markets in the long term.
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