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How to Get That Fabled Unfair Advantage in Your Business Plan
This is one of the most important parts of any business plan.
In most of the business plans that you will encounter around, you will find this term: unfair advantage. You can also find it in the business plan template from my previous article.
But what is this advantage? What makes it unfair? How can you create that for your business? Why should you care?
What is the unfair advantage?
An unfair advantage is something that only you have. It can be anything, from patent to data. The important thing is that you need to be able to keep that advantage for some period.
Your idea is not an unfair advantage. Your MVP might not be an unfair advantage. You can start without having an unfair advantage, but you must build it. It’s only a matter of time until somebody else competes directly with you and takes your customers.
You can even have an unfair advantage from a mix of things. A great UI combined with a great UX. On top of that, it solves a real problem for the market. Sprinkle some great customer support and you're good. For a while.
While customer support is a good advantage, there are few industries where that can work. Enterprise and B2B businesses usually benefit the most from good customer support.
A loyal customer base could be an unfair advantage. But you need to be sure you are keeping your customer base happy. Try to have as many advantages as you can.
Features could also be an unfair advantage. But be sure your experience doesn’t suffer from too many features. Too many buttons just make interfaces look cluttered and increase the learning curve.
You can get that unfair advantage by talking to your early adopters. As soon as you get some people onboarded, reach out to them. See how they use your product/service, what friction did they encounter, and what to improve next.
What makes it unfair?
The whole point of the unfair advantage is to keep you ahead of the competition for some time. If somebody serious comes to the market, they cannot get to your level in a couple of weeks.
Being first at something does not count as an advantage. Sometimes it could even be a disadvantage if the market is not ready for you.
You need to research the market just as much as you research the problem. The problem you are trying to solve might be real. But if the market is not ready to solve that problem, your work will just go by unnoticed.
There is a way to identify your unfair advantage before you work on your product/service. The trick is to carefully study the competition. See what other people complain about the competition and what they want in terms of features or experience. If those complaints are real pain points, then solving them will give you an edge.
It sure helps if you also check how you can integrate the current mega-trends in your new service/product. I cover most of these mega-trends in a previous article.
How can you create that for your business?
The first thing you need to do is understand the market. What does daily life look like for the people from that market? What products/services do they use? How can you improve those?
Try to find the places where people from that market hang out. It could be a forum, it could be Reddit, Facebook, Twitter. Join those communities and consume, consume, consume. Get as much information as you can.
After you know what daily life looks like for your audience, find the key products/services from that market. See how people use them, and what they complain about. Can you improve the experience in a meaningful way?
Meaningful is also a pretty subjective term. You need to reach out to people and ask them if it’s important to them. You can make a faster Excel, but would people actually care about that? Do people want a faster Excel?
See how you can make your product also privacy-focused and environmentally friendly. Even if your product is digital, you can still make environmentally conscious choices. Websitecarbon makes this transparent. It even gives you tips on how to improve your carbon footprint.
But all these should be more like sprinkles on the cake. Your market might appreciate that, but chances are they are focused on something else. It's your job to find that.
You should keep in mind that the market is like the sea. It's always moving, and you are not the only boat in the sea. That means you need to keep investing in more advantages.
Even if you are light-years ahead of everybody else from the market, keep developing. But don't make this keep you from shipping. We are not talking about MVP's here.
So, before we go to the practice part, let's recap:
Track the market
Get feedback from actual people
Use the feedback to discover advantages
Keep investing in your advantages
Always check how to get more advantages
Find 1 subreddit where people from your market hang out.
Find 1 Facebook group where people from your market hang out.
Find 5 “influencers” from that market group on Twitter and follow them.
Consume for 2 weeks.
Start reaching out to them.