Imagine you are floating in a beautiful, clear blue ocean. This ocean represents the industry that your business is in. Now, imagine you are floating in a red ocean, muddied from the bloody battle of overcrowding and competition. The difference between the blue ocean and the red ocean is that in the red ocean, the majority of companies in an industry battle each other for the same, limited fish, while in the blue ocean, a single or a small number of companies serve under-served populations or even create new groups of customers—new fish. There is no competition because they’re not competing for the same fish or offering the same options.
What makes some companies able to float in a blue ocean and avoid the red ocean is a unique, creative way of differentiating. But instead of creating a new product or service or other innovation that replaces existing offerings in your industry—which is what many innovative companies do, like what Uber is doing to the taxi industry—a blue ocean company seeks ways of finding new areas of the ocean that aren’t so muddied with new fish that weren’t, previously, consumers of the industry.
A blue ocean company doesn’t look at its competitors within their market to get ideas of how to differentiate by out-performing, over offering, or underpricing the other companies; instead it looks outside of its own industry for opportunities and insights. Instead of doing a better job at what everyone else is doing, they do something completely different and add value that no one else has thought of. They take advantage of the fact that most organizations within an industry have group think and they are all distracted with trying to beat everyone else in the same game.
Blue ocean companies create a new game. They don’t remain within the confines of industry convention and structure or stay trapped doing things the way it’s always been done.
Tesla Motors is a great example of a blue ocean company. In 2003, they decided to innovate into an areas where there was no competition. Other car makers at the time were making “compliant” cars, meaning the were making hybrid cars to show they were meeting the government’s mandates to be working on “green” technology. Sales of these products were low because they weren’t terribly good and the benefits did not outweigh the extra costs of the hybrid models. Tesla decided to go a different direction and create a 100% electric car, which had been done before. But, Tesla did what others said was impossible. They overcame most people’s arguments against electric cars—they’re slow, they don’t go far enough, and they’re ugly. The Tesla is a sports car. It is fast, goes over 300 miles in between charges, and is sexy too! In fact, recent tests show that Tesla has faster acceleration than Lamborghini and Ferrari!
You might be thinking my, “industry doesn’t have a blue ocean.” Ford, GM, Toyota and the rest of the big car companies didn’t either, but they were wrong. They allowed industry norms to hold them back:
- They were held back by the notion of the money they thought they would lose if they made electric cars that took sales away from their gas cars. You see, car dealerships and manufacturers make so much money off the repair costs of cars that they don’t want electric cars to replace internal combustion engines because electric cars have extremely low maintenance costs.
- They were held back by their assumption that there was no market demand for electric cars because of the objections people had to them—slow speed, poor range, and ugly aesthetics.
- They were held back by the powerful established influence of the oil industry who didn’t want the car industry to disrupt their profits due to gas-powered engines.
And so, they all continued to compete in the red ocean of the auto industry, refusing to see the possibilities.
Elon musk, the billionaire founder of Tesla, created a blue ocean for electric cars. And, his innovation has planted the seeds of disruption for the entire industry. Not only did Tesla invent an electric car that meets all of the needs of a car driver and avoids the pain points of older electric models, they pioneered the technology of autopilot. Along with other companies, like Google, cars that can drive themselves without any human intervention, and do so with many times greater safety than human drivers, are already on the road. In the near future, autopilot vehicles will be replacing traditional drivers, including those who drive taxis or large commercial trucks. And next, they’re coming for average car drivers. As autopilot cars become more accepted into society, many people will choose not to buy a car at all because an individualized form of public transportation will have arrived.
The blue ocean that Tesla created may not always remain blue, which is why ongoing creativity, future anticipation, and innovation are needed in any business that wants to remain successful in the long term.
You might be thinking, I’m not Elon Musk and my company isn’t playing at such a large scale. The good news is that the blue ocean mindset can applied to any business, whether you’re an insurance company, a maker of widgets, a doctor, or a life coach. No matter what industry you are in, you can start thinking like a blue ocean company
Let’s look at another example: the ZocDoc App. Doctors’ offices all use scheduling software that the receptionists use to schedule appointments for patients. The program is installed on the computer systems in the office and there is fierce competition among software companies to get doctors’ accounts. ZocDoc created a blue ocean for the industry. They made an online app that makes it possible for patients to book their own appointments online or on a mobile device. The doctors’ office staff can also access the app to book appointments and change availability. It’s a blue ocean because they created a new market. Instead of their customers being the doctors’ offices, their customers became the patients themselves. They were no longer competing with the other companies in the appointment scheduling industry.
So, how did they come up with this idea?
First, they flipped the industry’s pain points. They identified what existing customers found challenging, frustrating, or unsatisfying about the current options available to them. In this case, the scheduling software was very expensive, it had to be installed by professionals and staff had to be trained. So, they sought out to solve these problems by offering something different. Because their new program was accessible in the cloud and didn’t have to be installed on computer systems, and because it was user friendly and simple and didn’t require training, they dramatically reduced the costs and solved both problems.
Second, the flipped non-customers. Instead of creating the new program for existing customers—the doctors themselves—they created it for the patients. Doing this created an entirely new market for their product.
You, too, can adopt a blue ocean mindset for your business by asking questions that other people in your industry are not asking:
- What are the pain points my customers experience? What inconveniences are they experiencing and what needs are not being met?
- What are the alternatives to this product or service that non-customers are choosing instead and why are they making that decision?
- What standards in my industry could be dramatically raised to add tremendous value and attract customers to buy from me that would normally have overlooked my offerings?
- What standards in my industry could be dramatically lowered and still meet the needs of my customers while lowering my costs?
- What standards or elements in my industry could be completely eliminated or replaced, dramatically reducing time, cost, or other negative factors?
- What elements or factors could I create and offer that my industry has never offered?
- What are companies in other industries doing that is differentiating them or creating new markets and what insights can I glean from them?
When exploring the answers to these questions and generating ideas for potential new areas of growth within your own blue ocean, it’s important to test the idea against the following criteria, to ensure it is viable.
- Is it useful to the prospective buyer, meaning did you or can you test demand?
- Is it able to be executed without confusion or resistance, meaning can customers understand this new offering simply by reading the tagline?
- Is it able to be priced within range of the target audience and also be priced for maximum profitability?
If your idea meets these 3 criteria, you’re on the right track.
Creating a Life Coaching Blue Ocean
In my business, Joeel and I created our first blue ocean as life coaches, and we’ve continued to apply this strategy to all of the other aspects of our business.
The key to creating a blue ocean life coaching business is focusing on a life coaching NICHE that YOU are uniquely able to serve.
If you identify a specific result you can offer your clients—a problem you can solve for them because YOU have solved this problem for yourself—you will have a blue ocean. This an be a challenge you overcame or even an expertise you can teach to others. If you offer a very specific form of life coaching based on what you, uniquely, can provide because of your unique life experience, then you’re automatically in an ocean all your own. Why? Because your ideal clients can relate to you in a way no one else can duplicate.
There is no competition when you’re selling yourself.
Of course, there are many other ways of going outside of the “normal” life coaching industry’s offerings.
- For many years, the first coaches who offered “virtual” life coaching had a blue ocean because everyone else was still meeting only face to face.
- Then the next coaching blue ocean was group coaching, and the first coaches who started to meet with groups through teleseminars and later webinars reaped the benefits of their uniqueness.
- Combining “teaching” or consulting with traditional coaching was another revolutionary idea (and still is to some degree). This has been the differentiating factor that has transformed my business.
So, the question is, what NEW innovations are on the horizon that could be applied to life coaching (or whatever you do)? How could you do something radical that no one else is doing?
Be bold. Be you. Be BLUE.
Of course, there is a lot more to successfully creating a blue ocean company than I’ve covered in this article. If you are interested in finding out more about how to implement blue ocean strategy, visit blueoceanstrategy.com and read the books on the topic written by W. Chan Kim and Renee Mauborgne, professors of strategy at INSEAD, one of the world’s top business schools.