Answer by Jason M. Lemkin:
Well, you probably can't make it in a large, crowded market if you have "no new innovative product offering."
But take a pause.
Crowded large markets are good. That means you can scale quickly — if, if, you hit it.
But, in a crowded market, you probably have to be 10x better than the current market leaders. Not 10x better than the past. How do you do that? The market already has great products.
So, redefine the 10x:
- Can you be 10x better just for one vertical or segment? For sales? For finance? For procurement? For small businesses? For very large businesses? Can you be 10x more "secure" than the competition? E.g., you don't have to be 10x better than Salesforce in every way to build a $100m ARR businesses. You just have to be 10x better at some small part of CRM.
- Can you be 10x better for where the market is going, not where it is today? Can you be 10x better on tablets? 10x better on phablets? 10x better on Bitcoin? 10x better outside the U.S.?
- Can you put together 10x better of a team? This is very hard, but if you can do it — it does work. An epic team can outsell, outclose, and ultimately, outinnovate the competition.
- Can you be 10x better if you are 10x narrower? Or 2.5x broader? Maybe just do one piece of what the competition does, but do that piece 10x better. Or do it all, but only one piece really well, a piece the competition doesn't highlight. And highlight that piece like crazy. Or maybe, the market might want a product that does more than the competition. Not just CRM, but CRM+Billing. Not just invoicing, but expense reports+invoicing. I dunno. But as markets get bigger, and more established, there's more room for players that also do more.
The bigger the market, the more opportunity there is to take just a segment, a slice, and be 10x better. You don't have to be 10x better than everything if the competition is a billion+ in revenue.
One thing that is tough is to just be cheaper, at least in the enterprise. Changing the fundamental economics of a whole category can be great. But just cheaper? It's hard to just be 10x cheaper. Even if you can pull it off … at least in the enterprise, in B2B … you'll look … cheap. No one wants a Yugo. Not really.