It’s never easy getting new brands off the ground, especially those competing in stagnant categories dominated by big players with decades of brand recognition, massive retail distribution and equally vast marketing budgets. How can new brands turn their “smallness” into big opportunities? As the founder of a new-generation line of hair color products competing against an industry giant, I’ve experienced all the classic challenges, and then some.
Here are four tried-and-true leadership strategies that can give small companies a true competitive edge.
1. Build a better product that solves real pain points
Some categories remain stagnant for decades because incumbents have no incentive to innovate. Identify real customer pain points, obsess over them because you’ve experienced them yourself and translate them into real product improvements. In men’s hair color, for example, these included messy application, complicated processes, and harsh, skin-irritating ingredients. You are, at once, the (frustrated) customer, problem solver and founder.
Big companies spend millions on focus groups, consumer insights teams and innovation consultants. But as the architect of your own small brand, you can skip all that when you have direct experience with the pain points or access to customers who do. Instead of spending money on commissioning market research, I spent hours reading every single review of competitor products and, eventually, our own. Every complaint became a product development brief. Every “I wish this product would…” became a feature we actually built.
The word “Simpler” in our name came directly from my own experience struggling with overly complicated competitor products that required mixing, timing, and a chemistry degree to use correctly. At my prior startup, Sokikom, a math game for elementary kids, we ran dozens of classroom tests to understand what kids struggled with most in math, and then tested various game-based strategies to address those challenges. It was a very iterative process that kept our users’ needs and problems at the core.
As a small business, your proximity to your customer is your superpower. Stay closely in step with the customer experience until you’ve built something you know people love.
2. Don’t be afraid to flip the script on outdated assumptions
This is one of the best ways a small player can think and act “big.” Incumbents often operate on assumptions that were true 20 years ago. They move slowly because changing brand positioning requires committees, approvals and risk assessments. As a startup, you can read the cultural moment accurately and act quickly on your observations. In men’s grooming, for example, there was a stigma around hair color, which wasn’t seen as “manly.” We leaned in with confidence and helped normalize the conversation. Small brands have the agency and the advantage to innovate in a market full of outdated beliefs and messaging.
3. Don’t play the game; change the rules
When you’re competing against a company that owns 96% of the market, you cannot win by playing their game. They can outspend you in nearly every channel, every day, forever. So don’t try to compete for the entire market; compete for the customers they’re failing to reach, and in the channels where they’re weakest. Sometimes, super-dominant companies become complacent, selling to everyone and optimizing for no one. Try focusing on customers who have already tried incumbent products but are disappointed. This is a ready-made market of buyers who just need a better option.
You can’t outspend Goliath, but you can out-focus him and compete with him on the battleground where he is weakest. Your resource constraints are actually a strategic advantage; they force the discipline that bloated incumbents have lost. In addition, it’s smart to focus on DTC because you can leverage social content to tell your story and visually demonstrate why you’re better.
4. Maintain strategic composure under fire
Large corporations use legal intimidation as a business tactic. They know small competitors probably can’t afford prolonged legal battles, so they weaponize the process itself. The goal isn’t necessarily to win in court; it’s to drain your resources, distract your focus and make you question whether the fight is worth it. Refuse to be rattled or overly distracted. While legal threats require a professional, measured response, they should never consume your attention or emotions. Invest in capable legal counsel when warranted, and consider it a cost of doing business. And never, ever let legal strife distract you from your most meaningful purpose: serving customers.
When you’re small, your greatest vulnerability is losing focus. Once you start thinking more about lawsuits than customers, you’ve already lost, regardless of what happens in court.
Remember: budgeting for legal fees is a cost of success. Established players assume you’re scared and inexperienced, but your experience is simply different from theirs, and that difference is a point of strength. Remain composed, protect your interests and never let legal strife win the day. The best revenge, after all, is building a business so successful that the bullying amounts to nothing more than noise.
The startup advantage isn’t doing big-company things on a smaller budget. It’s doing things big companies can’t do — moving fast, staying close to customers, making decisions in hours instead of months and having the courage to challenge assumptions the industry stopped questioning decades ago. Thinking big doesn’t require you to be big; it means seeing the opportunity that size and bureaucracy have blinded your competitors to, and moving on it before they even notice you exist, all while remaining calm, grounded and cognizant of your strengths.
And lastly, don’t forget to exercise self-care. Daily exercise, running, meditation, yoga and proper nutrition are key to staying composed under fire. Think of them as the armor you don before going into battle.
Opinions expressed by SmartBrief contributors are their own.
____________________________________
Take advantage of SmartBrief’s FREE email newsletters on leadership and business transformation, among the company’s more than 250 industry-focused newsletters.