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The Destructive Myth of Market Share

There’s something very destructive at work in the minds of most aspiring entrepreneurs. And even some moderately successful ones (not as much the REALLYsuccessful business owners).

And that is the THE MYTH OF MARKET SHARE.

You know, the enthusiastic brand new CEO standing proudly in front of a panel of VC’s, presenting his company’s outlook…

Going over slide after slide of market analytics and numebers… until THAT moment comes.

“The market is worth $4 billion, so conservatively speaking… if we ONLY grab 1% of that market, we’ll be looking at $4 million in revenue, just for starters. But in reality our plan is so great, we could end up with 10% or even 40%, and that means…”

At which point the VCs’ ears have long been shut and the game is lost before it even begun.

Because the investors know full well that the whole idea of ‘market share’ is flawed. It doesn’t mean anything.

No company gets ‘their share of the pie’. Everybody makes their own pie! 

tops

Creative Commons License photo credit: me and the sysop

But that’s not the only reason why this whole myth of ‘market share’ is so destructive, flawed and just plain wrong.

It is even more destructive in the hands of companies who simultaneously try to grow, and buy into this myth.

And that is because they believe that everyone else in the market is their enemy, and they must do everything to ‘beat them’, even stop them from succeeding. That any headway others make, it’s somehow detrimental to their own business, ‘out of their quota’.

It makes no sense, and doesn’t hold to ANY closer scrutiny.

Let’s say you’re an importer of goods, and you import widgets from China, and sell to 5 retailers in your own country.

Then a competitor comes along, imports a similar ‘competing’ widget from China, and sells to 5 other retailers in the country.

How did that diminish your original business? It didn’t. It’s only in your mind that you feel the pressure of someone else being in ‘your’ territory.

Get over it, it’s NOT ‘yours’. It’s all about the customers.

THEY get to dictate the truth of the marketplace.

JOH_3161

Creative Commons License photo credit: star5112

But that’s still not all – here’s perhaps the most destructive aspect.

The amount of new business you’d be losing by working against these perceived competitors could be robbing you out of the growth you say you’re after. It’s very much possible, even likely that by working together, you could both grow even faster.

But if you view them as your enemy, often they both end up destroying each other, and in the end the customer loses.

Actually, that’s not 100% correct. The customer will always find the best solution available. They don’t care about any petty territory disputes. They just want their problems solved.

So get that idea of ‘market share’ out of your head, start working FOR your customers, and WITH your peers (as opposed to competitors).

I guarantee you your bottom line will quickly prove to you just how superior that route is.

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