Happy New Year!
One thing I generally don’t like when speaking with others about entrepreneurship, is the illusion a lot of people have that you have to have something brand new that has never been seen before to succeed. This is a big misunderstanding, and I even think that most times it’s an advantage to have competitors. If you have competitors people already know what your product is. You don’t have to teach them about that and create a demand for your product.
Competitors will also keep you awake. You have to keep moving all the time, to avoid getting shot.
I recently read an article by Joel Spolsky, called Strategy Letter III: Let Me Go Back!
As Joel writes, there’s nothing wrong with competition:
There's nothing wrong with being in a market that has established competition. In fact, even if your product is radically new, like eBay, you probably have competition: garage sales! Don't stress too much. If your product is better in some way, you actually have a pretty good chance of getting people to switch. But you have to think strategically about it, and thinking strategically means thinking one step beyond the obvious
Joel talks about his experience from working on the Microsoft Excel team when Lotus 123 was leading the market for spreadsheets. The single thing that really caught my attention was his list of barriers to enter. Not barriers to entry, which is something very different.
As Joel writes:
The only strategy in getting people to switch to your product is to eliminate barriers. Imagine that it's 1991. The dominant spreadsheet, with 100% market share, is Lotus 123. You're the product manager for Microsoft Excel. Ask yourself: what are the barriers to switching? What keeps users from becoming Excel customers tomorrow?
And then he provides a list of barriers along with solutions that they needed to get right in order to succeed. And we all know where Lotus 123 is now.
| Barrier | Solution |
| 1. They have to know about Excel and know that it's better | Advertise Excel, send out demo disks, and tour the country showing it off |
| 2. They have to buy Excel | Offer a special discount for former 123 users to switch to Excel |
| 3. They have to buy Windows to run Excel | Make a runtime version of Windows which ships free with Excel |
| 4. They have to convert their existing spreadsheets from 123 to Excel | Give Excel the capability to read 123 spreadsheets |
| 5. They have to rewrite their keyboard macros which won't run in Excel | Give Excel the capability to run 123 macros |
| 6. They have to learn a new user interface | Give Excel the ability to understand Lotus keystrokes, in case you were used to the old way of doing things |
| 7. They need a faster computer with more memory | Wait for Moore's law to solve the problem of computer power |
That got me thinking about barriers to enter in regard to E-commerce software.
Barriers existing shop owners have when switching E-commerce software:
| Barrier | Solution |
| Having to manually enter existing data | Make it easy to import data. |
| Fear of losing existing URLs in search engines | Match old URLs with new URLs, so that a 301 permanent redirect is done to ensure search engine positions. |
| Having to learn a new product/UI | Have in-UI help for every feature. Use question marks with un-familiar input fields with a tool tip that explains in detail. Have a read more link in tool tip, if a more extensive explanation is required. |
| Fear of having to renew existing merchant account and payment gateways | Add support for merchant accounts and payment gateways as needed. |
| Fear of losing expensive SSL certificates | It is possible to export and import those. Explain! |
| Fear of losing domain names | Communicate up front that this is not the case. All domains are supported. |
| Fear of losing existing e-mail lists | It is possible to import. We keep it safe in our database. |
| | |
And I hope I’m not done yet.
Think about yourself, and count how many times you’ve actually contacted a company when having questions about their product or services that are not adequately answered on their website. My count is definitely very low, and I think that is simply because we all know that no matter what you’ve found online, there’s another website that offers the same thing. So we just hit the back button to see the search results page and click the next result.
Same thing for users online
Have you thought this way about your own business? Imagine all the small details that people could be worried about. If your product is somewhat complex, there are probably a million questions you have to answer immediately.
It’ll gain you trust, and as a user you’d feel happy about visiting a website or store where you, yourself, found all the answers to your questions you had and decided to buy.
You have to make users happy, and you can do that by making them feel in control.
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