When I work with startups that are analyzing market opportunities and existing firms that are exploring other opportunities, I try to frame the discussion in terms of white space. There is nothing proprietary about the term “white space” – it has been around at least since the dot-com frenzy of the 1990s, if not before then. White space essentially means that place where unmet needs are discovered that enable the creation of innovative products and services.
White space is somewhat of a relative term though, and it is largely dependent on where a company is in its lifecycle.
For earlier-stage companies, defining white space may be a very external exercise, meaning that the firm is trying to determine whether a new product has any market potential. This is a pivotal juncture for startups, and the co-founder of Twitter, Evan Williams, expertly advises entrepreneurs for this initial white space stage well, stating, “User experience is everything. It always has been, but it’s undervalued and underinvested in. If you don’t know user-centered design, study it. Hire people who know it. Obsess over it. Live and breathe it. Get your whole company on board.”
On the other hand, for more mature firms, defining white space may be a very internal exercise, meaning that the firm may be looking to create a complementary product or service, repurpose an existing product or service, or discover a new audience for an existing product or service.
So, what are some examples of startups or more mature firms discovering white space?
I think a very relevant example of a startup discovering white space is Waitr, an innovative food delivery service capitalizing on the on-demand and concierge-oriented needs of consumers. Waitr, a company hatched out of Startup Weekend New Orleans, launched its food delivery and carryout service so customers can order, and have delivered, their favorite foods from local restaurants. This service not only provides customers with a new level of convenience for a nominal fee, it also provides restaurants who are not in the business of food delivery a new revenue stream while building a nontraditional customer base.
Waitr was founded in 2013 in Louisiana and, to date, has expanded into multiple cities throughout nine states. The company, by seeking out and valuing customer feedback, has continued to successfully evolve with the needs and desires of their customer base and their service partners. For instance, the leadership’s focus on white space has led them to recently add a complementary new service in certain markets, grocery delivery. They are also in the process of adding an alcoholic beverage delivery service in select locations as well, another example of vetting and pursuing strategic growth opportunities.
Earlier this month, it was announced that Waitr was sold to Houston Rockets owner Tilman Fertitta for $308 million. This is an exceptional example of how finding – and defining – white space can be very profitable, especially for startups and early stage companies.
Finding white space can also be incredibly profitable for more mature firms as well. Apple is an example, having found white space with a complementary product or service when it introduced the first version of the iPhone in 2007. Apple put the power of a personal computer, phone, and camera in the hands of ready and willing early adopters. There are no words descriptive enough to measure the transformative impact the iPhone has had on the way we live, work, communicate, document, and record our lives.
The discipline of analyzing white space is not without risks, however. For startups, finding white space can be a make or break decision. For more mature firms, discovering white space can be risky and extremely expensive. Regardless where a firm falls on the lifecycle spectrum, pursuit of white space should be a crucial focal point of any organization’s strategy.
In addition, we live in a time where federal, state, and local government should be implementing business solutions that have long been leveraged by the private sector. This fact leads to the question: Can state and local economic development organizations apply white space strategies to further enhance economic growth?
The answer to this question is yes. I would argue that not only should state and local economic development organizations implement internal white space analysis strategies, they should be one of, if not the most, pervasive. After all, economic developers are vital to the business growth of both public and private entities, and the resources they can provide – from educational to financial – are essential tools in ultimately creating strong industries and a robust workforce.
Is your organization finding – and defining – its white space?
Matthew P. McLaughlin is an attorney with McLaughlin, PC in Jackson, Mississippi, and serves as the executive director of the Mississippi Brewers Guild. Matthew’s passion is working with creative and entrepreneurial-minded people and organizations, having worked with and advised hundreds of entrepreneurs, startups, and social innovators throughout the Southeastern United States. He may be contacted at email@example.com or 601-487-4550, or you may visit www.mclaughlinpc.com for more information.
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