There’s no secret that being the first mover in an industry provides enormous benefits.
While you have to figure out a lot of things on your own, the competition has yet to arrive, so you’re free to navigate the waters with less efficiency and significantly fewer headaches. One of the great advantages is having free reign over the job market. Specialists and leaders aren’t being poached by direct competition, salaries and benefits are less entrenched, and your business seems attractive by just being novel.
That’s not our story and not the story of thousands of businesses across the globe. Yet, we managed to reach a level where we’re treated as a serious competitor by those that came before us. You have to learn to build, scale, and hire in saturated markets with strong competition.
Scaling, thoughtfully
When you’re the first mover, there’s a lot of ground to claim. You can scale wildly as long as the market and product fit together well – you won’t have to face a lot of competition. So, businesses can pursue growth with wild abandon as there’s plenty of room and little friction.
What many newcomers to an industry will do is follow the success stories. While it’s a strategy that works for some fields, in saturated markets with established businesses the conditions become different. Growth and business development becomes harder, especially in industries such as SaaS where brand loyalty, integration, tech stacks, and many other factors play important roles.
Implementing the same strategy as the first mover becomes fraught with challenges – the conditions that allowed them to grow no longer exist. Unless you have a lot of money to burn, it isn’t likely to bring in the same results. In these cases, it’s time to turn things around a little bit. From a business development side, focusing on core value drivers is the way to go as larger companies will often now have split their attention to several products or services, neglecting one or another part of what made them successful.
From a human resource perspective, hiring should be implemented the other way around. Executives should keep in close communication with various levels of the organization to discover areas where valuable work isn’t reaching the required pace.
While it may seem difficult to executives working in major corporations, smaller companies have the benefit of having short lines of communication. There’s not a lot of filtering through intense reports going on, so direct communication is still possible. Simplifying things a bit, that means executives can find teams where there’s more work to do, but not enough experts to fill in the role. Instead of trying to find employees that will eventually drive business growth, business growth drives employee acquisition.
That’s what we did at IPRoyal – residential proxy providers are a dime a dozen, but many entered the market earlier and scaled quickly. Our strategy was to scale in accordance with our business achievements, all the while focusing on clear, value-driving roles. Each employee arrived with clearly defined workloads as the latter appeared before the former.
Opening new channels and products
There comes a time in business development where experimenting with new avenues for growth is a necessity. But there are always more opportunities than resources – executives can create new data analysis, digital marketing, account management, and many other teams.
An added struggle is that new channels for growth always have an unclear ROI as there’s no expertise within the organization. For example, while creating a dedicated SEO team is likely to bring in positive ROI, without in-house expertise, you can’t properly evaluate whether the person(s) being hired will bring in the best possible results.
Marketing is especially susceptible to this phenomenon. Without strong foundational knowledge, it’s impossible to grasp whether 5% growth quarter-over-quarter is the absolute maximum or not. And the executive will have to rely on the expert, who is incentivized to say that whatever their results are, they’re the best possible ones.
Our approach has been to evaluate strong agencies within their field and create a partnership with one of them. If their results bring in good ROI, we can then suppose that an in-house team will be able to do the same, albeit at a lower cost. In other words, we made sure to get expertise at various levels of a marketing channel to evaluate if the channel itself will bring in value.
Product development can follow in a similar fashion, but looking at competitors is now more valuable. Executives should be careful when doing so, however, as development stories are more important than current offerings.
Large companies will have attempted (and failed) to introduce new products and services. Competitors can serve as a guide of what works and what doesn’t. An important feature is looking at the stages of development in relation to product introduction – you shouldn’t be attempting to introduce their newest offerings as your second product or service. They likely have more money and resources to burn and something advanced may not be as feasible.
Standing out to potential employees
The final struggle newcomers will face is finding good employees to continue scaling their business. If the market is already saturated, many of the industry giants have already acquired many highly experienced and motivated workers.
Additionally, industry leaders will often have more resources to compete with so higher salaries may not always be a possible option. There’s a path, however, most businesses follow when they go from a startup, to an SMB, to a corporation. And it can be exploited by smaller businesses.
One trend is that larger businesses need more detailed processes, precise definitions of job-related roles, and, overall, less freedom. Most of the time, it’s simply a natural progression of businesses due to increased risks and a greater number of people.
Small businesses can flip the script – by hiring slowly and thoughtfully, you can find people that will appreciate and make use of the greater degree of freedom. At our company, we implemented “radical freedom”, which means that if a highly skilled expert arrives, we provide them with full reign over their domain.
Part of the reason is that executives cannot ever know all fields better than the experts that have been working in them for years. We provided them with the opportunities to create their own team (providing budgets when necessary) and full decision making powers. Our executive branch puts full trust in our newly hired expert or lead and doesn’t participate in the day-to-day operations at all. Too many executives think they know everything better than everyone else, hampering efficiency of in-house specialists.
Another interesting trend, especially within the SaaS space, is that as companies grow, they tend to focus on creating entertainment-related benefits while eroding work-related benefits. You’ll usually see lavish parties, the newest gaming consoles in the office, and various other entertainment devices.
Providing entertainment and fun to employees is not bad per se. Trading off work-related benefits (work from home, additional paid time off, less strict sick leave, etc.) for entertainment will turn away many leading experts. Smaller companies can capture numerous leading experts that leave corporations simply by offering unlimited remote work capabilities. While it requires a lot of trust from executives, small organizations also have an easier time keeping tabs on whether work is truly being completed.
In other words, newcomers to the industry can put less emphasis on entertainment within the company and more emphasis on creating a valuable work environment for employees.
Implementing these strategies (and many others) have allowed us to grow mostly unimpeded, remain bootstrapped, and become a serious industry player – all within a highly competitive environment with numerous, long-standing brands that have had the first mover’s advantage.
Mindaugas is a serial entrepreneur who has established multiple internationally recognized businesses across various industries such as NordVPN, Oxylabs, and he’s focused on his current ventures – IPRoyal, a leading residential proxy provider.
His strong track record in building highly successful businesses has enabled IPRoyal to arrive at the top of the industry. Leadership skills, understanding employee and market needs, and the ability to craft highly detailed business strategies are all areas where Mindaugas excels at.
