ArborBridge Co-founders Share Three Things To Do When Your Market Is Dominated By Giants
It can be difficult in today's competitive business space to rise above all the noise so your product or service can be discovered and heard. It becomes even more difficult when you are not one of the dominate players in your market and fall into the shadows of big players with big budgets that allow them to make most of the noise. But it certainly isn't impossible, which I recently learned from Andrew Finn, co-founder of SAT preparation service ArborBridge. Andrew shared with me three things that they did to stand out out in a market dominated by giants.
ArborBridge was founded in 2011 and delivers personalized, high-end SAT preparation services to college bound students. In 2014 it released a new test preparation system called truePrep. ArborBridge is a high-end, luxury service, costing up to $9,000 for 60 hours of tutoring; the goal is to provide the best SAT/ACT prep possible in the SAT prep space. truePrep, on the other hand, is $75 per hour. According to ArborBridge research, students who complete 12 hours of test prep with ArborBridge raise their SAT score on average by 200 points.
What was intriguing, and quite impressive, to me was how truePrep faces off against it's larger competitors, like Princeton Review, Kaplan, Sylvan Learning and others, in the SAT prep space. I spoke with Andrew Finn and he shared with me his advice and tips on how to stand out in a market as the smaller 'new guy' on the block.
"First, think about what you would do if you were you were starting from scratch in your industry today, and then build that company. Most established companies have business models and cost structures that have evolved over time and are outdated, and starting from scratch gives you a huge advantage.", says Finn
In truePrep's case, their competitors have always focused on classes and self-study books, with one-on-one, online, tutoring as an afterthought. That meant that they have a bloated cost structure with retail locations that focuses on mass marketing over product development and quality. Student preferences for technology, the convenience of online tutoring, and the obvious benefits of individualized learning gave truePrep a real structural advantage by paying tutors more and charging less, while offering a better curriculum for one-on-one tutoring.
In truePrep's case, they knew that a marketplace alone wouldn't solve the problem because SAT prep is such a high-stakes event in a student's life - it wasn't like buying a toaster where you could write a bad review and feel just okay about it. They had to hire carefully, then integrate a ground-breaking, technology-enabled curriculum that would guarantee that tutoring programs met the highest standards. They couldn't afford to have any negative student outcomes, unlike other marketplaces where you have to take some bad with the good.
As a final tip, Finn suggests, "Third, start with a niche to get you some traction, but think big. You're not going to take out the big companies over night, so you need to start with a wedge - an area that they don't really care about. For us, that was originally online tutoring for international students who had no access to elite American tutors (ArborBridge worked with kids from 40 countries last year). But to move from your niche to thinking big, you need to start with the question, "how do I put big Competitor X out of business?". Not how do you compete... how do you put them out of business. The difficulty of answering that question will give you the intellectual discipline to think of something truly disruptive."