Booked review: Oversubscribed
Acquiring a practical edge in starting up a new business
The central lesson of Oversubscribed is that you don’t need a large number of customers to make a handsome living but you need to create a market on your own terms.
Jean Pierre de Villiers is one of London’s highest paid fitness trainers. His clients apparently pay him £40,000 (€55,000) a year, with fees paid six months in advance. He only works with high-flying wealthy men who travel all the time and who believe in his personal fitness philosophy. JP, as he is known, has eight clients and turns down business all the time.
It wasn’t always that way. When Daniel Priestley first met him, JP’s fee was £45 (€62) an hour and he was burnt out from long hours of work, six days a week. If you called him, he would find a way of squeezing you in. Priestly explains that he convinced him to create his own exclusive market. The personal trainer wasn’t convinced initially, believing that there was a market rate for personal trainers in London of about £40-60 an hour.
However, trusting his new adviser, JP’s personal niche was created. He wrote a book, tailored his offering to his market and raised his profile. He spoke at business events and was featured in exclusive magazines. In the process he created his unique high-value market.
The central lesson of Oversubscribed is that you don’t need a large number of customers to make a handsome living but you need to create a market on your own terms. By Priestley’s own admission, the strategy involved isn’t rocket science. Simply laws of supply and demand dictate prices. The trick is to create demand that outstrips supply.
Achieving a high profile is a major help. Priestly outlines a strategy of becoming a key person of influence. This involves a consistent and repetitive message and creating quality content via blogs, articles, videos and books. A commercial ecosystem is needed. Some customers will want to make a small purchase from you of £100 or less, some will be happy to spend £1,000 and some will be happy to pay more again.
Continuity is important so you need to pay attention to your online profile as people will want to know your background and what you have been doing over the last few years. As you develop your own brand, collaboration with higher-profile partners is also vital but you need to consider which partners will add value to you.
To achieve your goals, you need a market imbalance and there are four drivers for this, Priestly explains: innovation, relationships, convenience and price.
Innovation is where you create a unique product with a niche of buyers who want it. Relationships works in situations where buyers ignore other sellers because they have a strong preference for you. Convenience is being in the right place at the right time. Price works where you create an efficiency others don’t have that you can still turn a healthy profit on.
Look carefully at established markets and you will often find that there are four big players occupying one of these segments, with many examples in the car, airline, hotel and telecommunications markets, Priestley notes. Often they major on one aspect and pick one secondary area to focus on. It is difficult to occupy all four. You can’t be highly innovative and convenient, he contends, as it takes too long to scale.
In regard to price, the message here is an encouraging one for SMEs. Small service businesses can compete on price and still make very healthy margins because they don’t have the high overheads that large firms have. They can operate from back-bedrooms, use cheap or free software and can adapt quickly to market trends.
Priestley blends practical business advice with psychology. He talks about the herd mentality. When selling something like a business event, he says, your goal isn’t to engage people one at a time, it’s to create a stampede all at once.
There’s plenty more in this vein in this lively and highly inspiring book about entrepreneurship.
The author’s own narrative has him leaving his native Australia and arriving in London in 2006 with just a suitcase and a credit card, before building a seven-figure revenue business in two years. He is now a sought-out speaker and fundraiser for early stage businesses. He appears to have learned some valuable lessons along the way.