In the end, it boils down to this: it’s a lot easier to be an entrepreneur than it is to be an innovator. And there is nothing wrong with that. If anything, it should be celebrated.
For a blue ocean, there is no magic formula however there is one for a red one. All you have to do is work harder than 50% of all the competition and do what they do a little better. That’s the equation.
One of the necessary skills in entrepreneurship is being competitive. Of course, tales of a red ocean can be scary, and you can be competing against the same product, same price, same budget, and so on. So, your competitive advantage is you – your skill set and traits.
It is important to never be afraid of your competition or failure because entrepreneurship has no place for cowards. You must take risks and go head-on, so inner competitiveness helps in adapting and changing your approach to remain relevant.
You must also be prepared for conflict –not in an armed sense of the way. If you’re afraid of conflict and, more importantly, if you’re afraid of losing, then the business world is not for you.
On the other hand, a blue ocean can be a lot much work with nothing to show for it. A lot of people talk about how a blue ocean mindset is critical to uncovering hidden opportunities, especially in the post-Covid economic crisis. But while that is true, very few talk about the downsides of such a strategy.
Any way you look at it, a blue ocean is anything but easy. When all is said and done, innovation is among the hardest things for any company to achieve, especially repeatedly. Coming up with novel ideas and uncovering untapped, profitable markets is difficult. Even when you find an uncontested market, you might have gotten there too early or be too new or too different. The market may not be ready, so you need to educate it, bring it clarity, and warm it up to your idea. Such a task means you need to thoroughly prepare and arm yourself with patience, persistence, and optimism that your strategy will pan out. And even then, there’s no guarantee. Other companies from saturated or adjoining markets will be lured in.
It is equally important to note that a blue ocean strategy is not about staking a claim to a market and innovating. The way I see it, it’s about being the first to get it right. There was eCommerce before Amazon and online internet banking services before PayPal. But we know those names because they got it right.
In a red ocean, there are different sets of challenges, but the foundation is already there. The target audience knows what the product is, and you know that it works and what the benchmark is. So, almost by default, you know what you should do to get a piece of the pie.
Not everyone has the proper mindset
When I first read Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne back in 2006, it had a profound effect on me. It opened my eyes to how the pursuit of differentiation and low cost to open a new market space creates new or greater value for customers. In short, it’s just one of those books that every entrepreneur should read to gain new insights, learn new ways of thinking and simply be better at what they do.
Still, the core of the blue ocean’s problem is how to create a new market space. It requires a drastic shift in focus–moving away from the competing mindset (supply side) and settling into an innovating mindset (demand side).
But – innovating is hard. You don’t just get to learn a few things, try a few methods, and come up with something new. A lot of things must align–from skills to emotions so that the right mix of experimentation and collaboration yields a result. And let’s not forget – executing new ideas is 100% pricier than doing them after someone else.
A blue ocean is a great dream to have but a red ocean is a realistic place to succeed. You don’t have to be innovative or creative, just persistent, and competitive enough to do something just a little bit better.
One of the best, modern examples I can offer is a company called Monday.com whose bread and butter is project management software. The company stepped onto the scene way after Trello, Slack, Jira, and other players established themselves in the market.
Monday.com was more user-friendly, the funnels were better, it was marketed smarter, and overall, it was more efficient than other solutions. As I know some people from their team, I can attest that they worked hard to be where they are today – a unicorn responsible for one of the largest public offerings by an Israeli company.
So, to conclude, there’s no denying that a blue ocean is a very potent and desirable strategy – but people don’t realize how hard it is to pull off. A lot of entrepreneurs get hung up on the idea of embracing what makes them and their business unique, then create this vision in their minds that their business shouldn’t be bound to the rules of the competition.
That’s fine up to a point – a point where you diminish your skills and traits that define you as an entrepreneur. That’s when you start to lose, big time.
Written by Ronen Menipaz, Co-founder of M51