Recently, I spoke to my good friend Chuenyang about all the ideas I will be embarking on in 2007. One of it is the SingaporeBusinessDirectory.com.sg. Well, no need to check… at the time of this posting, it is definitely not up yet. A semblance of it will probably be out somewhere in the mid of next year. (Yes… i do not really like to do things in a rush… generally i try to ponder over my idea and concept a couple of weeks before going ahead with it… )
What happened was that my good friend found the idea less than promising. One of the main reasons why this is so is because of the immense competition. The idea is somewhat similar to Yellow Pages. He felt that even if it is successfuly, it is difficult to assume that Yellow Pages will just sit there and do absolutely nothing about it.
Well, I beg to differ. It is very difficult for Yellow Pages to do anything in a short while. The main reason is that all the costs structures are already in-built into the system. They have to charge that amount for that amount so space in order to pay their hundred over salesman. Can they honestly offer something good for free? Its like… I have a recurring business model of e-marketing that I am earning a good sum of money from…. If some joker comes along… and says… hey use my system for free… just put an advertisement at the bottom for us. Would I bother changing my pricing to be free?
Honestly, I can’t. Reacting in such a way will result in too big a costs for me. At the end of it, even if what I do take a small slice of business from Yellow Pages, Yellow Pages will still be more proftiable maintaining their business as it is. By simply reacting to an insignificant competitor like me…. will simply costs more than …. not reacting…
He he… anyway.. i not so clever lah. All the above theory all taught to me by Dr Lee Khai Sheang… I believe its called the substituition strategy. Its like … if starbucks is selling branded kopi at 4 bucks… and you offer exactly the same thing at 2 bucks… will it trigger a price war? No lah… ‘cos there will still be enough people that wants the 4 bucks kopi… and star bucks will earn less reacting to you. It will be better for them… to just give up on their cheapskate clientele and focus on the exclusive group which is willing to pay for their brand with top dollars….
Anyway, also read a nice quote from the Aristotle book, which says something like:
One is that in most circumstances of challenge and adaptation, small is better than big.
Of course lah… if not.. where got start ups???
