You know what I get asked all the time?

“Jon, should I stay away from this market because it is so saturated already with too much competition?”

So, what is the answer?  Without being political, let me answer by saying yes AND no.  First I will answer why you should stay away from these busy, competitive markets, and then I will explain why you should go after them head first.

Yes, Stay Away from that Saturated Market:

This is what most people want to hear.  They want to hear that the reason their business or website is struggling is that there is simply too much competition.  It’s an easy cop-out because it means it’s not your fault.  Anyone would have failed in your position.  Markets that are heavy with competitors are more expensive to compete in.

• Ad costs are higher f0r these markets
• SEO is more difficult
• Competing websites already have thousands of backlinks and years of age that you can’t match
• Other websites are already getting loads of traffic
• Other companies already have earned the trust of their customers and visitors

All these reasons will make you want to just choose another market and admit that you have bitten off more than you can chew.  You simply chose the wrong niche, and your website will be better off being sold on Flippa for pennies, while you try to go after a little less competitive market.  Besides, a market that is already so saturated will surely see a decline in interest soon.  It’s ok that you are missing out on all of the profits that could have been made because it would be impossible to do what everyone else is already doing.

This is where I would splash a cold glass of water in your face and say you are DEAD WRONG!

NO, Go After that Saturated Market Full Throttle:

I want you to think about 3 companies:

1. 5 Hour Energy
2.  Facebook
3.  Google

What do these 3 companies have in common?  That’s right, they all entered “saturated” markets and totally dominated.

5 Hour energy came on the scene in 2004.  Do you know how many other energy drinks were on the market at the time?  Well, Red Bull was pretty much running the show, and there were also energy drinks like Hansens Energy drinks, Monster, Jolt, and a few others as well.  The market was pretty well saturated looking at how many other people were doing the SAME THING.   So the 5 Hour Energy people decided to do things a little differently.  They made the drink more like a power shot, loaded it up with vitamins, and gave it a snappy name that would automatically tell people what it does.    The results, they are now the ones dominating the market and companies like Red Bull had to change their marketing strategies to also have a “shot” energy drink.

Facebook was also birthed in 2004.  But why did they bother?  You already had Myspace, Friendster, and LinkedIn.  I mean how many social networking sites does the internet need anyway?   But Mr. Zuckerberg didn’t see it that way.  He entered what was considered a rather saturated market at the time, and did the SAME THING as everyone else, but with a lot of major changes.  Facebook made it easier to connect with friends and was more focused on college students who made up a huge part of the pioneering users.  A few years later they are the single most visited website in all the world with over 600 million users and counting.  (side note: 70% of Facebook’s users are outside the US)

Google was not incorporated until 1998.  But who did they think they were entering a market where there were already dozens of search engines?  People were already using Dogpile, AskJeeves, Hotspot, AOL, Webcrawler, Exce, Lycos, and a few more.  As small as the internet was back then compared to now, this was a pretty saturated market that Google decided to enter.  Now in 2011 they are the most used search engine in the world with 68% of the market share, and their name has become a verb that is synonymous with search.

The lesson:

If you are going to do the SAME THING as everyone else in your niche and do nothing to stand out, then by all means do NOT enter that saturated market.  But think about it.  The markets that are full of competition is where the money is.  There is a reason that so many companies are fighting for the #1 spot.  It’s because they know there is money to be made there.  If you are a go-getter; if you have a great idea that no one else is implementing; if you are willing to work hard to do things differently in that saturated market, then go after it full throttle.

I like attacking saturated markets with a niche website because I know that if I get enough attention it will be a real winner.  But you can’t expect to stand out when you are doing exactly what every one else is doing.

• Be a 5 Hour Energy where you come up with an innovative product with a cool name.
• Be a Facebook that designs a site that is more user friendly and makes interaction fun.
• Be a Google that simply does it better and makes it easy for people to find the answers they want.

They all entered saturated markets and won, but it was not an accident.  They entered the SAME market with a DIFFERENT approach.  So what is your unique idea that gives your website or business that edge.  If it’s good enough, it won’t matter how much competition you have.  Soon THEY will be the ones wondering if that market is just too tough for them.

I’d love to hear some comments from those of you who have gone after saturated markets.  Let’s hear some do’s and don’ts!