for creative entrepreneurs

Shark Series: Will Competition Replace You?

When a founder presents in the Shark Tank, one of the questions they will be asked is whether or not their product or idea is patented. The Sharks want to know whether or not the product, if it gains traction, will get easily knocked off by unscrupulous copy cats.

One of the problems that many food-related products have is an inability to patent their products. The Sharks know that if they make inroads, securing a share of valuable grocery store shelf space, then the big conglomerates will quickly fill the new product category with brands of their own. The new company will end up getting crushed—and all their investments along with it.

Successful Products Must Be Proprietary

For a product to survive and thrive it has to be unique and irreplaceable by its alternatives. If a product is not unique, or if it’s just a new variety in a class of many competitors, it may temporarily grab some market share, perhaps get a boost from being the “newest” version, but it’s not sustainable in the long term. It will fade as quickly as it grew. That’s a huge vulnerability, and it regularly causes investors to take a pass on such companies.

Is a Creative Practice “Patentable”?

Creative entrepreneurs often find themselves with a similar vulnerability. If there is nothing proprietary about their services and there are many similar options on the market, their growth can be extremely difficult to sustain, particularly if they try to increase the value of what they offer in order to demand a higher price for their work.

When creatives first start out on the path of entrepreneurship they’re hungry for experience and creative opportunities. They’re often young, with no mortgages, no kids to feed, and are happy to live on pizza and Ramen noodles. Among the crop of new creatives that enter the market each year are some that will not make it. Others will make it, but it might take them quite a while to learn the ropes before they become serious competitors. And some are profoundly talented and will begin snagging jobs left and right. All of them however are going to be charging a fraction of the rates that you need to charge. They also tend to have a lot more energy than those of us who have been in the business for decades.

The Creative Industry is Truly an Open Market

Unlike the product world, where unscrupulous and shady manufactures can knock off protected ideas, there at least exists the possibility of protecting intellectual property through patents and lawsuits. But all the fresh young creatives do nothing wrong at all when they offer low rates—yet this creates the same kinds of market problems that knock offs do.

What does that mean for you as the investor in your creative business? How can you protect your market share? How can you keep the valuable “shelf space” you’ve earned over the years? How can you maintain your business, demanding higher prices, when there are so many lower-cost alternatives available?

Differentiation is a Necessity

At the very least you have to position yourself as being more valuable than these plentiful other options. You can make the case from your greater experience, you can make a case about dependability, you can try to distinguish your more mature processes. But one way or another, you have to give a reason why your client should value what you provide and freely choose to pay you two to three times more than what they might pay by jumping to the services of a new young gun.

Certainly, experience and dependability are valuable and a solid reason for a client to stick with your services and even pay a premium. But how much of a premium? And for how long? Among the ever-expanding sets of fresh new talent are some who will gain traction quickly, proving their entrepreneurial savvy and becoming true competitors and viable alternatives. When you think about your value propositions, and your differentiators—your claims to irreplaceability—how far does that go? How much of a premium can you demand and hold?

Competition is great for markets, especially for their consumers. But as a competitor in the creative services market, we need to guard our investments similarly to how Sharks seek to ensure their investments—by looking for proprietary aspects in the companies they invest in.

PinPoint Positioning to the Rescue

This is just one more reason why the path of the creative generalist is not sustainable long term, and why PinPoint Positioning is so important to creative entrepreneurs. Specialists with highly specific areas of expertise are far more capable of making unique value claims, and demonstrating irreplaceability than generalists.

So if you want to protect the investments you make in your creative business, you should seek to develop some industry secrets, some proprietary expertise—solve some truly unique problems, and you won’t get upended by upstarts.

Are you ready to take the struggle out of finding new clients?