Know Your Market… Intimately
Immersing oneself early in a given market can often be the fast track to expertise. Draw material from your own life experience–it is what we all know best.
Know your Market…. Intimately
Budding writers and playwrights are often advised to draw material from what they know best–their own experiences or lives. The business equivalent–know your market inside out.
Multi-billionaire Wayne Huizenga built a one garbage truck company into Waste Management–one of the world’s largest trash hauling companies. Huizenga knew his market instinctively. His Dutch grandfather collected garbage in the late 1800s. At one point during the 1980s, a dozen or so of Huizenga’s family members ran trash-hauling operations. A serial entrepreneur, Huizenga went onto build two more multi-billion dollar companies–Blockbuster and AutoNation.
Early immersion in a given market is, in fact, the springboard of many fortunes. As a youngster, James Leprino, whose company supplies mozzarella to the largest pizza makers in the US, helped his father make cheese for his small business.
S. Truett Cathy, founder of Chickfil-A, learned to cook chicken at his mother’s knee after school as a teenager.
Steven Cohen perfected tape trading by studying stock-price movements from a Long Island breakage.
Timber baron Tim Blixseth learned the trade growing up in Roseburg, Oregon. And the stories go on and on.
It is absolutely true that marketing the market evolves with time, as is the case of Italian millionaire Flavio Briatore, the son of a schoolteacher. Briatore made his fortune marketing Benetton fashion and a Formula One racing team. Along the way, the 56-year-old jet setter learned firsthand the need of conspicuous consumers. Now, in a venture called Billionaire Italian Couture, he is joining forces with designer Angelo Galasso to sell such spendy items as a $45,000 crocodile jacket and $1,000 belts to his fellow super rich. As Briatore recently told Forbes magazine, “This is the market I know. This is the people I know because I’m rich I know what the people want.”
One by-product of market mastery is being able to identify new wrinkles and underserved niches, even in established sectors. “Experts have more highly differentiated cognitive ability,” says entrepreneurial studies teacher Professor Shaver. “They can see opportunities others can’t and figure out how to turn them into a business.”
For example, in the mid ‘80s, Thomas Stemberg was itching to start a business. Stemberg had had an earlier career in grocery store management and was almost tempted to go into the business himself but extensive research lead him to conclude that he couldn’t improve on the existing grocery chains. At the same time, he saw a wide-open underserved market in the office supply business so Stemberg started Staples Inc., the $18.2 billion chain of office superstores.
Next week– No. 5 Focus Obsessively and Work, Work, Work…