About 305 million startups form annually, though on average only 10% of these survive and become fully fledged businesses. With the majority of startups going under in their first year or two of operation, it’s important for entrepreneurs to maximize the chances of their startup’s success and this starts with developing a strong competitive edge.
A competitive edge is what distinguishes a startup in the market. It can be centered around unique features of a product, related to the customer experience, focused on your personnel, or even tied to the brand. Through a strong competitive edge, startups are able to stand out in even crowded markets and this translates to sales, recognition from customers, and long-term business growth.
As the alternative protein sector continues to develop and become more crowded, it is important that new entrants bring novelty to stand out from the larger, now legacy, brands.
Specific to this category these competitive elements could come in the form of:
- Novel Ingredients – there are thousands of edible plant species though only a small fraction of these have been domesticated and are farmed for regular human consumption. However, many of these “lost” ingredients could offer nutritional benefits and flavors superior to what we are familiar with. Incorporating these ingredients and their benefits into product offerings could offer a startup’s products an edge over others in the market.
- Entering A Market First (the “First Mover Advantage”) – While there are now many alternative protein companies, there are still regions where it is difficult to obtain these products and cuisine styles that are difficult to cook with the plant-based offerings currently available. Meeting a market need by offering the products consumers seek can be a strong way to build an edge for a growing start-up. Within Asian markets where the desire for seafood and pork-style items is higher than in the U.S. market, alternative protein companies have seen success and rapid growth by focusing on these products over others, like chicken or beef.
- Distinct Branding – Developing a brand message and aesthetic that consumers resonate with and recognize can be a strong tool for startups seeking an edge. This not only makes products pop on crowded supermarket shelves, but it sparks loyalty from customers which can evolve into repeat sales and rapid adoption times when new products are launched.
- A Strong Team – Building a team with diverse business strengths and expertise in key areas can make all the difference for a startup, particularly in the business’s early days. This can be developed and enhanced by a strong advisory board and including members who are known for their success or insight into the market can act as validation for a young startup and accelerate growth.
While there are many ways a competitive edge can be developed for a startup. Founders should focus on one or two key aspects that differentiate the company and ensure these factors are as strong as possible and extremely difficult to replicate by any copy-cat businesses that may start. For example, if your company’s unique selling point is the incorporation of a novel ingredient, ensure your company uses it better than any other company could – this competitive edge could even be protected as IP in the form of patents or company secrets.
When communicating with potential investors the competitive edge of the company should be prioritized and articulated clearly. It should be obvious to investors what makes this startup different from any others in the market, and there should not be confusion around this.
Prioritizing the competitive edge of a startup can make the difference to its survival. This edge should be clear, easy to communicate, and difficult for competitors to replicate. It should be one of the crucial considerations for any entrepreneur starting out and is becoming increasingly important in this space as the number of startups in the alternative protein market continue to rapidly grow.