Ultimately, your goal is to dominate a market, not compete in it. The best businesses I know are the ones that own their market. I define owning a market as having more market share than all the other competitors combined.
For instance, you should have at least 50% of the market share if it’s a fragmented market. Meaning the balance of the competitors combined would have the other 50%. If it is not very fragmented, then I recommend you have 60%, 70%, or even 80% of the market. Dominate, don’t compete.
To dominate a market, ride a long-term innovation cycle to position yourself as the central company in a growing industry.
1) Identify the longterm innovation cycle.
2) Determine a scalable platform technology.
3) Launch fast with what you have.
4) Get in early, but not necessarily first.
5) Dominate the market (Target 75% share).
6) Focus on revenue growth (>25% CAGR).
7) Build brand and customer loyalty.
8) Consolidate by buying competitors.
9) Pivot and reinvest as market adapts/changes.
10) Plan for the next generation (25 years).