Starting a business in a traditional industry can be a daunting prospect. But in true David vs Goliath fashion, small businesses can compete with corporate giants…and win. The secret? What startups often lack in resources and experience, they make up for by the bucketload in agility, unique consumer insights, and a lot of elbow grease.
We often hear David vs Goliath stories, from Uber taking on the whole taxi industry, to Netflix taking down Blockbuster and revolutionising the media world. But for every startup that makes it, there are thousands who don’t – with the lucky few billion-dollar startups earning the coveted “unicorn” status.
In our humble opinion, Hubble is the David to the commercial real estate Goliaths. We have learnt a fair few lessons since we started out five years ago, when we were dismissed as “niche” and flexible workspaces as a “fad”. In this edition of our scaleup series, Tushar – Hubble CEO and Co-founder – shares his own experiences, plus three pieces of invaluable advice to any entrepreneur looking to enter a new market full of Goliaths.
1. Find a unique insight you believe to be true, that the giants do not
Tushar identified problems in the property industry whilst he was working, not as an estate agent or a property advisor, but as an investment banker. The fact that he was an outsider meant that he had a unique observation of the industry that those on the inside overlooked.
He began noticing time and time again that larger corporates had a problem with how much real estate and real estate liabilities they had, that they weren’t using, and was costing them a lot of money. And at the same time, he became aware that SMEs were struggling to access real estate without having to take on 20-year leases at outrageous upfront costs. “I started thinking if these larger companies want to use less space and be more flexible, and if smaller businesses can’t access space because it’s not flexible enough, then maybe there’s something here.”
Tushar carried out extensive research, developed his idea, and scanned the market to see if anyone else was addressing this gap in the market. It’s important, at this stage, to ask yourself: who are the key players? What are they offering? And are they addressing key challenges in the market?
It’s equally important to look beyond the industry itself and pinpoint rising trends and changes in attitudes/behaviours in the wider world. Tushar recognised that advancing technologies meant that businesses were starting to use less and less space and in different ways. He also noticed that there was a rise in SMEs and predicted that “in 20-30 years time, SMEs would become the heart of the economy” meaning that the property industry would need to respond to this changing landscape.
Tushar built his thesis from these insights and any evidence he could accumulate to support this case from extensive research. However, he didn’t immediately get the reaction he was expecting… his boss at the time scoffed at the idea, early investors didn’t buy into it and the property giants themselves were particularly sceptical.
You can watch Tushar speak candidly about his journey from idea to post-Series A company here.
It was easy to be disheartened and discouraged at this stage, but Tushar kept finding signals that his thesis was correct and the rest of the world was wrong – so he decided to quit his job and start the business anyway. If you have a unique idea or a strong belief about something that other people are really sceptical about – follow your intuition and double down on it.
Books and blogs to help you do this:
- Zero to One – Peter Thiel
- The Lean Startup – Eric Ries
- How to Start a Startup – Paul Graham
- Ideas for Startups – Paul Graham
2. Understand your customers better than the giants
Corporate giants are usually multi-billion dollar businesses that sell to millions of customers every year. However, this can also make them complacent as their service/product serves the customers of yesteryear. They often fail to adapt to new demographic trends, which seem small at the time but will become mainstream in the next 5-10 years.
This complacency is the biggest opportunity for startups. The path to success is speaking to as many customers as possible, pitching potential solutions, collecting feedback and relentlessly iterating the product until it is right. Large corporates need five levels of approval to conduct a single user testing session, which can take weeks – you can go to your local coworking space and speak to 20 customers in one day.
Your customers are the ones who are going to back your idea – so listen and learn, and you will start generating better solutions. As Seth Godin says, “It’s easier to make products and services for the customers you seek to serve than it is to find customers for your products and services.”
Books and blogs to help you do this:
- The Startup Owner’s Manual – Steve Blank
- The Mom Test – Rob Fitzpatrick
- Lean Market Validation: 10 Ways to Rapidly Test Your Startup Idea – Jim Semick
3. Build a unique product your customers will love
It’s really difficult for large corporates to change or discontinue an existing product (that generates billions in revenue) or pour money into developing a new one. They work on the philosophy of, “if it ain’t broke, don’t fix it” and are under strict quarterly reporting pressures from public investors.
This gives startups a huge opportunity to be creative and innovative. You can build a Minimum Viable Product from the customer interviews, then watch them use it in real-time. You can then use this information to keep developing it until you’ve built something they love.
If these customers love the product, they’ll tell other people about it and they will use it too! There’s no need for billion-dollar marketing budgets – you can start forming a loyal group of early adopters that love your product so much that they tell other people about it. This was a strategy that Monzo executed to perfection (with almost no marketing budget), taking them from being a plucky East London startup to a legitimate challenger to some of the biggest banks in the world.
Books and blogs to help you do this:
- Purple Cow – Seth Godin
- Enchantment – Guy Kawasaki
- How to Build a Product People Love – Insights from Phil Libin
If you can hone in on an innovative idea that you believe will be huge, that your research with customers has proven they will buy – you are well on your way to giving Goliath a good fight!
