I read a CNN Money article that had three short stories of current small businesses that were putting up a legitimate fight against some bigger, more familiar faces in the industry. One business went from making socks for L.L Bean and Brooks Brothers creating their own brand of tough athletic wear socks that rivaled TIMBERLAND's current athletic socks. Another offered natural and healthier baby food that competed against Gerber. The one I decided to focus on was SimpliSafe and its threat to ADT, the most poplar name in the security industry.
Chad Laurens is the CEO and engineer of the product. The company sells security systems and provides service in the event of an emergency. Chad's system is currently manufactured in-house and is designed to run solely off a wireless network, who uses land lines these days anyway?designed to operate off of wireless networks. The only marketing source Laurens uses is the internet. It's not even really marketed, just operated through their website.
Their are three major differences between the two companies and it's all about the use of their resources. ADT is a much more complex system than SimpliSafe which requires a professional installation service. SimpliSafe uses wireless sensors and the entire system is said to take less than 5 minutes to install. This allows the company to avoid installation charges therefor charging customers half as much as ADT to get started. The company also charges a 1/3rd of ADT's monthly service charge. That adds up to a significant annual saving while without effecting the quality and sense of security. Lastly, the design of the system provides alerts to your mobile phone for no additional charge. Currently, they are working on an app to go with the system that would allow someone to monitor the activity within their house. One of the things that I found surprising was how big this market is. SimpliSafe has doubled, maybe even tripled their sales from the last year to $15 million!
That's just one story of an entrepreneur who took advantage of a fairly apparent opportunity. It wasn't rocket science, making the business model and doing the planning may have been, but the idea wasn't. Chad distinctly differentiated his product while being comparable in quality. In most cases entry barriers would make it hard for the little guys to compete on price but in this case SimpliSafe not only competes but STOMPS on its competitors prices. What this article didn't try to understand was how the company operates in comparison to brand-name counterparts. SimpliSafe likely has a strong commitment to teamwork and the organization from it's employees. It would have been nice if the article focused on how Laurens treated the employees and if they were rewarded for their efforts. It's hard to startup a business as it is, but it has to be that much harder to maintain after the ball starts really rolling. The demand for their product is rising and that brings on a whole new set of responsibilities for the organization. I would be shocked if Chad has gotten as far as he has without having a positive organizational culture. I would assume his employees are motivated and inspired by Chad's current track record. Because who can confidently say that they established an organization from the ground (remember he actually designed the system and currently manufactures it in-house) all the way up to a multi-million dollar success story that competes with some of the industry's biggest names.
Team Three
Sunny Shah
No comments:
Post a Comment