Stalking the Wild Blue Ocean
A few weeks ago the finger pointing began when Maine lost the Kestrel Aviation manufacturing facility. This is a blow to Maine but not a deadly blow. We must understand that any large business “from away” is subject to being lured away by larger states with greater resources. This is a simple law of supply and demand. Larger businesses “demand” tax incentives and other benefits that smaller states can’t “supply”. This is a market reality that we cannot change. What we can do is change our response to this and build our capacity to develop local organically grown companies.
The Maine Center for Entrepreneurial Development together with its partner in Bangor the Foster Center for Student Innovation are helping the state of Maine build that capacity with Top Gun. Their challenge and my fellow entrepreneurs are not just building new business but to build the entrepreneurial capacity of the state so we and others can go from idea to a large business with strong ties to Maine.
Being in the Top Gun program has both reinforced many of my existing thoughts about business and has opened my mind to other ideas. In my business experience I have learned that the majority of entrepreneurs (many times that includes myself) as well as existing businesses focus on the technology rather than the needs and pain of the customer. One of the most interesting books that helped to shape my thoughts and our company in this area is “Blue Ocean Strategy -How to Create Uncontested Market Space and Make the Competition Irrelevant.” written by Chan Kim and Renee’ Mauborgne. This is one book that I strongly suggest every entrepreneur to read and understand.
“Blue Ocean Strategy challenges companies to break out of the red ocean of bloody competition by creating uncontested market space that makes the competition irrelevant. Instead of dividing up existing–and often shrinking– demand and benchmarking competitors, blue ocean strategy is about growing demand and breaking away from the competition.”
For me Blue Ocean Strategy challenges entrepreneurial companies to create uncontested market space by finding the un-discovered need or pain. A compelling example of this is Cirque de Soleil. Cirque de Soleil has been a global phenomenon and it achieved it not in a growing industry but in a declining one. It did not find customers in the existing circus market space of catering to children but created a new market, value propositions, with adult customers who were prepared to pay more for a special experience. One of Cirque’s first productions was “We Reinvent the Circus”. What they created was new customer value in a way that no one had thought of before.
This illustrates an important idea, our goal is to find new customer value or as in business they “value proposition”. The biggest entrepreneurial ideas are those that find a need and provide an innovation (business model or technology) that creates new uncontested market space with high customer value. These are the blue oceans– the big ideas — the entrepreneurial ideas that we all need to find and nurture here in Maine.
These ideas bring our greatest challenge. If you have a big idea that creates new un-realized value and is far afield from existing market segments how do you explain it, to the public, the investor, banker and even your employee’s. The really big ideas that build new markets are certainly possible and many of the Top Guns will make them into great business that Maine will be proud of, but with them a greater challenges is in explaining it. This is our greatest challenge and what Top Gun is helping us with.
The Top Guns are stalking the wild blue ocean!