Is it advisable to proceed if there’s already a venture based on a similar idea that you have?

Well, as with most aspects of entrepreneurship, there isn’t one right answer to your question.

 

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Whether it is worth starting another venture in an area that already has other players will depend on a number of aspects about the environment that you are going to operate in. I have tried to outline a few thoughts, but there will be many, many more aspects that others will have a perspective on.

Size and nature of the market opportunity
Is the market large enough to support multiple players? Is the nature of the industry predominantly fragmented (e.g. restaurants – many can co-exist) or is the industry dominated by a few large brands (e.g. e-commerce).

Do you have experience or competence that makes you particularly suitable to lead a venture in that space
Even in a market with some established brand leaders, it may be possible for an entrepreneur with deep industry experience to create a successful brand. E.g. in a crowded space of organizing/aggregating healthcare in India, someone with deep healthcare industry experience with an existing network and understanding of the challenges and opportunities can create a very successful venture, even if the existing players are dominant in the market. In fact, because of the person’s understanding of the industry’s challenges and opportunities, and BECAUSE there are a few large brands whose market share the venture can snap at, it may be an easier task for this experienced entrepreneur to consider a venture in that space.

Doing it differently
Even with existing players in the market, it is possible to create a distinct identity for the brand. Either on a service differentiator (same product, better service) or on a concept/value proposition differentiator (same concept, differently positioned) or a price differentiator (lower price/higher value or even higher price/premium positioning) or targeting a different target audience (younger or older or different income bracket, etc.) even a brand personality differentiator.

How satisfied are customers with existing options
If there is a serious level of dissatisfaction among customers/consumers, and complacency among established players, there will be good opportunities for newer ventures to capture that market.

Where do you do it?
Let me illustrate with an example. In India, there are 100s of companies that have attempted to do ERP for doctors or Clinic Management Systems (CMS). Almost everyone failed. Most attempted these in either Delhi NCR or Mumbai and a few in Bangalore and Hyderabad. Clinics in these cities are fed up with startups coming to them to be beta customers and are unlikely to entertain them as most past experiences have been a waste of time – either the product was bad or the startup shut shop.

However, there is a large untapped market in tier 2 cities across India where no one has approached those clinics with a CMS. If you target that market, despite it being a product already available, you could have an opportunity.

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Author: Prajakt Raut

Prajakt Raut is the founder of Applyifi.com, and author of the book for startups - ‘Starting Up & Fund Raising’ Prajakt personal goal in life is to encourage and assist a 100,000 people to become entrepreneurs. _____________ Prajakt is the founder of Applyifi - an online platform that provides startups a 36-point scorecard and assessment report on the venture's investment readiness [www.applyifi.com], and helps them improve their odds of getting funded. Prajakt is also the founding partner of The Growth Labs, a platform where growth-stage companies get sharp, incisive advice from senior professionals and experienced entrepreneurs. [www.thegrowthlabs.in] Before starting Applyifi, Prajakt was the head of operations at IAN, founding member of a leading incubator, and the Asia-Director for TiE (2004 - 2007). Previously Prajakt had co-founded Orange Cross, a healthcare services company, and was part of the founding team member of Idealake Technologies. While in college Prajakt had founded a printing business and has spent over 10 years working in leading advertising agencies. Prajakt’s book, ‘Starting Up & Fund Raising’, helps startups understand an investor’s perspective, and helps them improve their odds of getting funded. The book also helps entrepreneurs understand the building blocks of a business.

1 thought on “Is it advisable to proceed if there’s already a venture based on a similar idea that you have?”

  1. Dear sir,
    Thanks for nice article , this will increase my confidence ,as i willing to enter into eCommerce /online business like Flipkart.com, snapdeal ect ,my business idea is little different.from them ,i also know flipkart or snap deal already doing practical business while i am at concept or idea stage now i need to validate it. i need your guide , i also know after Dilip kumar ,Rajesh khanna ,after Rajesh khanna Amitabh Bacchan & now Sharaukh khan ,after shahrukh sure some one will occupy the place with new talent it’s could be from existing film industry or new face out side from industry .requesting you kindly write such type of article which help people like me having dream to be a next game changer in eCommerce Industry .please send me some link that help me to achieve my goal. i also watching your youtube video .

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