Seek Out Niches and Market Gaps: The Key Behaviors of Entrepreneurs, Part 4
Note: this post is part four of a six-part series on essential behaviors of entrepreneurs, as identified by Ernst & Young in the survey “Nature or Nurture? Decoding the DNA of the entrepreneur.” Read a summary of the report here. And be sure to check out parts one, two, and three.
When I say “girdle,” what’s the first thing that pops into your mind? “Grandma”? “Old-fashioned”? “1950s”? These garments were once ubiquitous, but they were uncomfortable and restrictive, and they fell out of fashion decades ago. And things might have stayed that way if it weren’t for Sara Blakely’s moment of insight: she wanted to wear a pair of white pants with open-toed shoes, so she went looking for a pair of footless shaping pantyhose she could wear under the pants. When she couldn’t find any, she decided to make her own. And that was the beginning of Spanx.
Shapewear wasn’t a new idea, but making shapewear comfortable, flexible, and appealing to young women was something no brands were doing. Blakely saw an opening, and she took it.
Ernst & Young point out that one of the great strengths of entrepreneurs over established companies is their ability to move quickly to fill in market gaps. “Although innovation is important, filling niches and market gaps does not need to involve coming up with radical new solutions,” they explain. “Often, an entrepreneurial business can simply find a better business model or a more effective way of delivering a product or service.”
Traditional hosiery manufacturers showed no interest in her idea, but Blakely knew she was on to something. She relentlessly pursued the idea of making better undergarments, and her persistence paid off: within two years Spanx was in Neiman Marcus and on Oprah Winfrey’s “Favorite Things” list. The brand exploded in popularity with everyone from celebrities on the red carpet to ordinary women and—as of 2010—men.
Why did Spanx catch on so quickly? One of the reasons upstart entrepreneurs are able to break into existing markets is that established companies tend to become risk-averse. Ernst & Young point out that entrepreneurial businesses “have the ability to experiment more readily than some larger competitors, where a stifling fear of failure may prevent a more innovative approach.”
Consider how long the most well-known brands have been in the market: L’eggs was introduced in 1969, No Nonsense in 1973, Leg Avenue in 1984. When Spanx launched in 2000, there hadn’t been any major innovations in hosiery in many years (unless you count L’eggs switching from plastic eggs to cardboard in 1991). The industry was ready for new ideas.
After the success of the footless pantyhose, Blakely moved on to redesigning other undergarments like slimming garments, bras, panties, and swimsuits. “All of Spanx additional products have come from recommendations of women I meet, what we want ourselves as women—we’re primarily a women business—and what we wish was already out there,” she said in an interview with Aol Small Business. Her strategy has paid off: this year Blakely made the TIME 100 and was named the world’s youngest female self-made billionaire by Forbes.
What can we learn from the Spanx story? The lessons for entrepreneurs are simple:*
1) Find an industry that has started to lag in sales and innovation
2) Come up with a great idea for a new product in the industry (this is the hard part)
3) Pursue your idea doggedly (this is the really hard part)
4) Listen to what consumers wish existed, and make it for them (this is the fun part)
5) Become a billionaire (this is the really fun part)
* Results not guaranteed. But results are possible.
