Innovation involves making choices about business models, marketing strategies, and technology. More often than not, entrepreneurs often find themselves at a crossroads between two key questions when launching a startup:
- Do we build an entirely new product or platform or breakthrough an existing market with innovative solutions?
- Do we compete in the market or collaborate with existing competitors?
Potential Startup Strategies
When launching a new venture, it is easy to go with the first practical strategy that comes to mind. However, taking the time to think through potential startup strategies that yield the greatest value may be more advantageous. By focusing on competition, collaboration, and innovation strategies, a new startup simultaneously focusses on value creation and value capture.
A startup’s innovation strategies must translate to revenue in order to be effective. However, innovation startup strategies involve more than the development of a new technology or patenting an invention. In addition to idea generation, the startup must also align its identity with the innovations that it is bringing to market. The technology industry is infamous for intellectual theft. Carefully managed patents, trademarks, along with solid research and development, can preserve a startup’s intellectual property portfolio. By maintaining control or the innovation, a startup can leverage its intellectual property through licensing or other cooperative measures and create long-term value in the existing market.
A startup who competes against established players aims to disrupt established products and services and the market share. Competition and disruption startup strategies can give a startup the necessary freedom to bring enhanced value to consumers and gain consumers established players may have overlooked. This is more easily done with a niche segment of the market. With careful planning, a startup that employs a strong competitive strategy in a niche segment of the market may be able to quickly build consumer loyalty. Paired with an effective innovation strategy that an established player is unable to reproduce, a disruptive startup may experience extraordinary growth and success.
Working with established players in the market allows a startup to benefit from a larger share of the market. By leveraging the gaps in an existing value chain, a startup can add value to the market by focusing on a competitive strength differs from the competition. Collaboration startup strategies call for a startup to focus on a single layer of the value chain where its strengths are unmatched. If innovation does not enhance a startup’s competitive position, the startup can still succeed if an established player is unable to compete in its own lane.
Effective Startup Strategies at IPS Legal Group, P.A.
Effective startup strategies do not rely on only one strategic approach. Finding the right balance with all strategic options allows a startup a better chance at success. The goal: identifying the right capabilities that can by captured with the right technology that can target the right consumer and disrupt the right competitors.
Disclaimer: This blog is not intended to be a substitute for legal advice or instruction. Every legal question calls for a different legal answer, and the above might not be applicable to your situation. Contact IPS Legal Group, P.A. today to discuss your entrepreneurial and business needs.