One of my most hated phrases from entrepreneurs.
I often hear from inventors and entrepreneurs who proudly state: “there is nothing like it in the market.” As if this was a badge of honor.
It is not.
This is a signal – and not a good one.
Everything in life is signal. Everything in life is telling you something. An astute observer of life – or just markets – will always try to discern the difference between the signal and the noise.
There are two explanations for the statement “there is nothing like it”:
One is that the entrepreneur has uncovered something that eight billion people have overlooked. The other explanation is that eight billion people do not think this is a problem worth solving.
In the first explanation, the inventor is smarter than eight billion people. In the second one, at least some of the eight billion people are smarter than the inventor.
Which is statistically more probable?
When I hear the statement that there is nothing like it in the market, I cringe. It is a dead giveaway that the entrepreneur is not being realistic.
“There is nothing like it” – explained.
There is *always* something like your invention.
There is something the same size, made of the same material, sold on the same shelf, having similar cost, or addressing a similar customer need. There is always, always, always something that compares with your product.
Anytime I can compare one product to another, I can learn from the other product.
I can learn how they package their product, market their product, distribute their product, manufacture their product, etc.
One of the easiest ways to price your product, for example, is to find something that is about the same physical size and complexity. It does not matter that you are doing an automotive accessory and the product is a kitchen appliance. Products of the same size and complexity generally reflect the manufacturing cost. A baseline price might be inferred from the ‘similar’ product.
Once an entrepreneur declares that ‘there is nothing like it’, they bury their head in the sand and don’t take advantage of what they can learn from any other product in the market.
The biggest competitor is the status quo.
There is always a competitor in the market: the status quo.
Sales involves two steps: convincing a customer that they have a problem and convincing the customer that your solution solves the problem.
The status quo is the biggest competitor in the first step of the sales process. When “there is nothing like my product,” that means your customers do not even know that they have a problem.
It also means that your sales cycle takes two big steps, rather than one.
Convincing customers that they have a problem is far more difficult than convincing them of your solution.
When a customer does not recognize the problem you solve, your marketing must be much more educational and informative. This marketing campaign is much more expensive and much more lengthy than selling a different alternative to a known problem.
Of course, once you get them across the hurdle of understanding that this problem exists, your solution is the only option and the sale might be consummated.
However, just convincing a customer that they have a problem they do not recognize faces a very uphill battle. Compare that to a customer who knows they have a problem. When they know they have a problem, they just look for a solution.
When they don’t know they have a problem, there is a psychological barrier to first admitting that the problem exists and that their current solution is inadequate.
Like with all human frailties, the hardest part is admitting that you have a problem.
‘There is nothing like it’ is pure arrogance – or delusion.
“There is nothing like it” is a huge warning sign.
To the entrepreneur, it should be a warning sign that nobody wants your product – at least not without a mountain of marketing and sales.
To the investor, it should be a warning sign that the entrepreneur is not being honest with themselves.