Entering a blood-red ocean

When analyzing a market’s competitive situation, it’s pretty normal to talk about it using the “red oceans and blue oceans ” business strategy framework (see the book Blue Ocean Strategy by W. Chan Kim, it's great).?

A red ocean describes the situation where you will compete in an existing and established market. You must find a competitive edge or advantage, exploit existing demand, differentiate on product and/or pricing and simply beat the competition. In other words, it is highly competitive.?

A blue ocean describes the opposite. Here, you will be in an uncontested market with no or few competitors. You have to create new demand based on innovation and differentiation to attract what the theory calls “non-customers”, meaning people who don’t yet know they need your product but will buy it once they become aware.?

Helpdesk software , customer service software, live-chat systems, etc., is a blood-red ocean filled with world-class providers serving thousands and thousands of customers worldwide. So why the heck enter such a market??

Obviously, there are pros and cons to entering both red and blue oceans. It would require a whole book to analyze them all deeply. And it’s funny when you start to analyze the pros and cons; the advantages can be turned into disadvantages and vice versa, depending on your approach.?

Going into a blue ocean has the advantage of no to low levels of competition because it’s an unexplored market. This is good because you can potentially dominate the market (until it gets mainstream and crowded). I personally think that Formalize is a great example of this, and the team has done an amazing job of establishing themselves across Europe in record time! However, entering a blue ocean also means that you have to educate the customers on your product and domain and why they need it (and equally important, why they should pay you for it). The effort in sales and marketing required here is massive.?

A red ocean is super competitive. In this case, you often don't have to educate the customer on what you're doing. They already know. On the other hand, you do have to differentiate yourself on pricing and/or innovation to stand a chance. Being innovative and finding new ways goes beyond the product itself. It also applies to customer acquisition (sales/marketing) and customer service.

Here’s how we want to approach going into a red ocean with Herodesk.io :

• Our product will be simpler than the alternatives. Full focus on the job to be done: Helping our customers give best-in-class service in the easiest way possible.
• Our product will be cheaper than the alternatives. Over the past ~5 years, the market leaders have raised prices again and again. Helpdesk software and other CX tools have become too expensive. Herodesk will be available to our customers at a price that's neither unreasonable nor artificially inflated.
• Offer something unique. We’ve already built integrations to Dandomain , Shoporama , ideal.shop – three Danish e-commerce platforms with more than 6.000 customers combined that no other helpdesk system integrates with. We’ll continue to do this in the future for more Danish and European tools and platforms (I'm looking at you, Quickbutik ).
• We want to be the small and medium business champions, always being on their side and helping them succeed with their business by making it easy to give the best customer service possible.
• Our product is our most important asset , but our customers are the oxygen our business needs to breathe . Customer involvement in product development and best-in-class customer service is our foundation.

While the market we’re entering is indeed a red ocean, I believe that by applying the above, we can make a positive difference for small and medium-sized businesses in providing great customer service and succeeding with their business.

Let’s go!