Blue Ocean Strategy: Stop Competing and Create Your Own Market
Most entrepreneurs make the same mistake: they choose a saturated market and then try to be better than the competition.
Faster. Cheaper. Better service.
It's exhausting. And typically, you lose.
There's a better framework. It's called Blue Ocean Strategy, and it changed how I think about business.
The Problem: Red Ocean
Imagine traditional circus in the 1980s.
You had Ringling Bros, Barnum & Bailey, and other competitors fighting for the same audience. Each one tried to:
- Get more exotic animals
- Book more dangerous acrobats
- Create bigger spectacles
- Lower prices
It was a red ocean literally: blood, fierce competition, shrinking margins.
This is the trap most startups fall into. You see a market that works, and you say: "I'll do the same, but better".
But "better" is relative. And it's expensive to prove.
The Solution: Blue Ocean
In 1984, Guy Laliberté and his friends did something radical: they stopped competing in the same game.
Instead of trying to be the best traditional circus, they asked:
What if circus wasn't for families with kids?
What if there were no animals?
What if it was an artistic experience for adults?
They created Cirque du Soleil.
They didn't compete with other circuses. They competed with operas, concerts, and luxury experiences. They created a new category.
And that's why they won. Not because they were better at the old game, but because they created an entirely different game.
How to Identify Your Blue Ocean
The framework has four key questions:
#### 1. What factors do I take for granted that I must maintain?
In traditional circus, the "mandatory" factors were:
- Animals
- Clowns
- Families with children
- Tent shows
Circue du Soleil eliminated almost all of them. And won.
In your business, what factors do you *think* you have to maintain? Often, they're exactly what you should eliminate.
#### 2. What factors can I eliminate?
This is the most powerful question.
It's not "How do I improve?" but "What can I remove?"
In my experience with Gestorías Cerca de Mí (a directory of local businesses), I eliminated:
- Integration with accounting software (complex)
- Manual data verification (costly)
- Phone support (expensive)
Instead, I created a simple product that worked. And it worked because it was different, not because it was better.
#### 3. What factors can I reduce?
Not everything has to disappear. Some factors can be less important.
Circue du Soleil reduced:
- Show duration (90 minutes vs 3+ hours)
- Production size (more intimate than traditional circus)
This wasn't a weakness. It was part of the strategy.
#### 4. What factors can I create or increase?
This is where you innovate.
Circue du Soleil created:
- Circus art for adults
- Coherent narrative and theme
- Premium experience
- Acrobatics based on athletics, not animals
They didn't compete on price. They competed on experience.
Practical Examples in Technology
#### Netflix vs Blockbuster
Blockbuster competed in the traditional movie rental market:
- More movies in stock
- Better store locations
- Faster returns
Netflix created a blue ocean:
- No physical stores
- No returns (streaming)
- Original content
- Unlimited subscription
It didn't win by being better at the old game. It won by creating a new one.
#### Slack vs Email
Email was (and is) the standard for business communication. Slack didn't try to be "better email".
It created a new category: real-time communication, by teams, without email friction.
It didn't compete with Outlook. It competed with how teams collaborated.
How to Apply This to Your Project
If you're building a SaaS, a directory, or any product:
Step 1: Map your current industry
Who are the competitors? What do they compete on? What are the "mandatory" factors?
Step 2: Question each one
For each factor, ask yourself: "Do I really need this? Or am I doing it because everyone does?"
This is the uncomfortable question. But it's where innovation lives.
Step 3: Eliminate, reduce, create
Don't try to be better at everything. Try to be different at something important.
With Nautilus VPN (my previous project), I eliminated:
- Complex technical interface
- Manual configuration
- Dense documentation
And created:
- Onboarding for non-technical users
- One-click connection
- Visual explanations
It wasn't "better VPN". It was "VPN for people who don't want to think about VPNs".
That's a blue ocean.
Step 4: Validate that people want it
This is where many fail. They create something different, but nobody wants it.
Before you build, talk to potential customers:
- "Does this solve a problem for you?"
- "Would you pay for this?"
- "How much?"
If the answer is "no" three times, it's probably not a blue ocean. It's just an empty ocean.
Why This Matters Now
In 2024, the market is more saturated than ever.
There's a SaaS for everything. There's a directory for everything. There's an app for everything.
Trying to compete directly is suicide. Competitors already have users, money, and scale.
But if you create something different—if you question the rules of the game—you have a real opportunity.
You don't need more money than them. You need a better idea.
And that's free.
The Framework in One Sentence
Don't try to win the existing game. Create a new game where you're the only player.
Circue du Soleil didn't compete with traditional circus. It competed with opera. And it won because nobody else was playing that game.
Your job: find the game where you're the only player.
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Credits: This framework comes from W. Chan Kim and Renée Mauborgne, authors of "Blue Ocean Strategy". It's one of the most useful strategic thinking books I've read.
