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Blue Ocean Strategies for Startups
best marketing strategies for startups

Best Marketing Strategies for Startups

The hustle, the noise, Dragons Den style panels ready to turf you out on the street for being so presumptuous as to call yourself a business.

The reigning narrative, often true, is that entrepreneurs and business owners should buckle up for sleepless nights and a torrent of agonising challenges.

Some may make you; most will sink you.

But not in Blue Oceans Strategy: How To Create Uncontested Market Space And Make The Competition Irrelevant by Renée Mauborgne and W. Chan Kim.

Written in 2005, Blue Ocean Strategy provides a set of tools and frameworks to reorientate organisations away from super competitive, price-cutting, bloody red oceans behaviour and into more serene waters where they can focus on value innovation over the competition.

While the book’s case studies are mostly large B2C organisations like Swatch, Cirque du Soleil, and Southwest Airlines, the underlying philosophies apply to businesses of any size.

And, for those small, autonomous outfits who are their own decision-makers, you may find there are fewer barriers to trying out a new business mindset.

So, below I explore three activities from the book while looking at a successful London Startup.

ODDBOX

Oddbox is a fresh fruit and vegetable delivery service that tackles food waste at the point of production.

The founders of Oddbox went on a quest to find out what happens to misshaped fruit and vegetables after it is grown. You can read more about their journey here.

The results were mortifying.

While most of us know that fruit that doesn’t fit the supermarket’s perfect aesthetic criteria gets thrown away, we didn’t realise that the quantity that doesn’t make it out of the farms is around 3 tonnes annually.

When you think of the resources that have gone into food production, when you think of the sharp rise in people in the UK queuing for foodbanks in the past few years, any way you look at it — it’s bad.

So, for founders Emilie Vanpoperinghe and Deepak Ravindran, the idea of Oddbox was born as an experiment to tackle the food waste problem.

The first versions of the box involved produce negotiated from the New Covent Garden Market, hand-packed and shipped off to a few households around London.

Now, they deliver 36,000 boxes weekly in the same greater area.

The Oddbox model appears to fit nicely with the Blue Ocean Strategy ethos of appealing on an emotional and functional level, creating a new value curve and appealing across new consumer groups.

What Is A Blue Ocean Strategy

Blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. It is about creating and capturing uncontested market space, thereby making the competition irrelevant.

Re-orientation is the central theme of the book; everything is up for reimagining; you, your industry and your customers.

You don’t need fancy software, a subscription, or a team of strategists like you might find in a large organisation; just a little bit of time, willingness and imagination.

In this process you will naturally move away from cut throat competition and into new waters where you can focus on different elements of your business.

I recommend reading the book whether reimagining your business in this new COVID and tech era appeals to you or if you just like the thought of pursuing calmer business strategies.

Re-orientating your business

Finding the sweet spot between emotional and functional

I tell clients they need to be audience focused and stay away from cliches and their eyes glaze over. The same thing happens when I go on about a clear call to action.

But when I tell them we need to understand their business’s emotional and functional value their ears start to wiggle; they are listening.

If you put your product or service on a spectrum with emotional at one end and functional at the other end, where would you be?

By emotional, I mean the effect your business has on the feelings of your customers; fears, desires, hopes, dreams etc.

By functional, I mean what your product actually does for your client, its utility, or purpose.

Most businesses will be stronger on one side than the other, but when you start to look at yourself from the other end of the spectrum, you begin the process of re-orientating your value to your client.

Typically tech firms are heavy on the functional side. The way they describe themselves is in the products they create. They list the technical features of a newly designed system or give an outcome without a purpose.

Some SEO specialists weigh down on this side.

Helping Google Find You’ — this is functional; it tells you exactly what they do, but there’s no emotional value.

Emotional value taps into how your product will make people feel, moving beyond helping Google find you to;

  • get closer to the people who matter
  • build your online identity and create a community
  • make you an expert in your field.

Every business has both sides; emotional and functional.

On the other end of the spectrum are wellbeing businesses who promise emotion but don’t tell you how they do it.

Companies who promise to ‘show you how to be the best version of yourself.

Yes, but how? Where’s the functionality?

When you know your functional and your emotional value, you understand your business and have a holistic view of its place in your world.

You’ve also got a theme that you can use in your content.

Oddbox

On a functional level, the Oddbox products are fruit and vegetable boxes which sounds nice.

But on an emotional level, they are much more.

Their tagline is Eat Fresh, Fight Waste which is emotional on more than one level — don’t we want fresh food and to feel healthy?

It also operates on a social responsibility level — Fight Waste — it’s combative, it’s stirring, it’s dynamic. When you buy their product, you are not only a consumer but an activist.

Knowing the emotional and functional value of what you do will help you better articulate your product or service, better direct it to your audience, help you innovate new ideas and products and help you market them all.

Reimagining your industry

Creating a new value curve on the Strategy Canvas

A strategy canvas is a visual aid for analysing the value points that your industry competes on.

The idea is to take a closer look at the factors that your industry considers important in their business strategy and then charting your value curve to see how you can or are differentiating.

The book uses the strategy canvas to explore many different industries, from aviation, wine, accessories and services.

Once you’ve listed out your industries focus points, Blue Ocean Strategy applies a four-action framework to create a new value curve.

The actions are:

  • Create — which factors should be created that aren’t on the canvas
  • Reduce — which factors don’t feel so important
  • Eliminate — which factors are entirely redundant and should be eliminated
  • Raise — which factors are there on the canvas that should increase in importance

When you redraw the canvas making the adjustments to your value line, you’ll find that you are now focusing on adding value; not just blindly following what other firms or voices are doing.

See the figure below for an Oddbox value curve against a supermarket in the fruit and vegetable industry.

Note — this is all hypothetical. I’ve made assumptions rather than contacting Oddbox for their actual strategy.

Oddbox

The strategy canvas for fruit and vegetable suppliers in the UK could look like the below diagram.

The first four factors along the bottom are traditional competing elements: visual perfection, buying choice, packaging, and pricing are all high on the list for traditional supermarkets.

Then we move along to elements that don’t seem as important as the first ones; delivery service and taste.

Then we look at Oddbox and the four action framework:

1. Create

To the industry, they have added: waste-free, sustainability and seasonability — these are all factors that supermarkets do not consider as important as the factors towards the left of the line.

2. Raise

Delivery service and taste are on the framework but not considered a high priority. Oddbox have heightened these elements.

3. Eliminate

The high scorer for supermarkets — visual perfection goes against the sustainability ethos of Oddbox, so that is out.

Because their supply is fixed, it is pointless to offer customer choice. They minimise packaging, so that is not a competing factor.

4. Reduce

Oddbox like organic produce, but ‘no waste’ is a more critical factor in supporting a sustainable supply chain, so the importance of that compared to a traditional supermarket is lower.

As you can see, the value curves are a very different shape.

Had Oddbox tried to compete on visual perfection or buying choice, they would have followed existing industry strategy and been sucked into the red ocean mentality.

If you do the same exercise with your business and your industry, what impressive results do you come up with?

Can you create a new value curve which is based on a new set of criteria?

Reimagining your customers

Creating demand by focusing on non-customers

The third point to discuss here is the Blue Ocean Strategy of creating new demand by looking beyond your current customer base.

Many businesses focus on delivering additional value to their customers by appealing to what their customers want and what they can articulate, which are not always the same thing.

This is a red ocean strategy and means that you narrow your focus; rather than stepping back and looking at the bigger picture to create more significant demand.

The Blue Ocean Strategy proposes an alternative course when trying to increase demand, focusing on non-customers.

There are three tiers of non-customers.

1st — those that exist already in your industry but are unsatisfied with the products they purchase; they are frequently on the lookout for new suppliers.

2nd — those who have actively chosen not to purchase products within your industry.

3rd — those that are unaware of the products or services available in your industry.

By focusing on the commonalities rather than on the differences, you can exponentially grow demand for your business.

This process sees you drilling down into the problem that your product or service solves for a potential customer, not what customers already know they want.

The book quotes Henry Ford,

If I had asked customers what they wanted, they would have said faster horses.

It is not the job of the customer to be innovative; it is ours!

Blue Ocean Strategy discusses a case study for each of the tiers of non-customers but taking a look at Oddbox, we can see the appeal across all three levels on multiple levers.

Oddbox

1. Industry customers willing to swap could be regular grocery shoppers who jumped over to Oddbox for the delivery factor, the seasonality or the quality factor

2. Trust in the quality of fruit and vegetable delivery may be something that prevented customers from engaging; ensuring the quality overcame the conscious decision not to engage.

3. Non-customers — a range of customers who like the idea of having produce delivered straight from the farm.

It appears that they have been able to create exponentially larger demand pools by focusing on on-customers.

With COVID and new working and living patterns emerging, now is the time to do a few of the Blue Ocean Strategy exercises on your business, whether you are new or have been around for many years.

Thanks for reading. I hope to see you soon in the blue ocean.

If you’re interested in reading more about the emotional-functional spectrum take a look at this blog.

I’m on a mission to unpick the myth of creative genius and have put together a short, digestible guide on creativity and how small businesses can develop this mindset.   Find out more here.

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