How to Stand Out with a New Startup

The Optimal Distinctiveness Theory (ODT for short) is a valuable concept that can be applied to launching a new startup. This theory suggests that people usually prefer a balance between something new and the things they already know. In the context of a startup, this means creating a unique and distinctive business idea while also fitting into the existing market.

So, in this article, we will discuss how to apply the Optimal Distinctiveness Theory in the process of introducing something new to the market.

What is Optimal Distinctiveness Theory?

Marilyn Brewer, an American scientist, brought forth the Optimal Distinctiveness theory in 1991, and it has since grown in prominence. It’s influenced various fields like sociology, management, innovation, competitive theory, and more, extending even into venture capital and startup spheres.

Marilyn Brewer’s pivotal work, “The social self: on being the same and different at the same time,” explores how individuals establish their identity within social systems by balancing assimilation and distinction. This balance allows people to form strong bonds by sharing similarities while maintaining their uniqueness, crucial for personal autonomy.

A small note before you start 

Before you jump into your project, it’s vital to understand that using a theoretical framework in your launch requires knowing the market and its main players really well. This understanding helps you evaluate how similar or different your project is. If you’re new to the market, not having this background info might make it hard to compare effectively. That lack of insight might make it tough to make smart decisions and assessments.

How much should a brand differentiate?

Holding a unique position can offer advantages and drawbacks: 

• it can lessen the competitive intensity 

but 

• might also suggest a departure from norms, potentially undermining the company’s credibility. 

The ODT addresses this conflict, suggesting that there is an ideal degree of uniqueness where a company can achieve equilibrium between the push to stand out and the need to fit in. 

In a study called “Optimal distinctiveness in platform markets: Leveraging complementors as legitimacy buffers,” researchers examined the MOOC platform market (MOOC stands for Massive Open Online Courses). They discovered that the ideal level of distinctiveness isn’t fixed; it shifts due to various factors, like having access to high-status complementors. These complementors help validate a product, providing recognition and acceptance cues for the brand.

The MOOC market is considered as a red ocean here. Originality and differentiation create benefits, advantages, and the opportunity for your startup to break through to the customer. Because it reduces competitive pressure. It won’t work the same way in all markets. But in the online learning market, it may well.

Going to extremes to innovate and appear radically unique in the highly competitive edtech field can sometimes result in customers turning away from your product. Introducing a groundbreaking product and proving its effectiveness demands time and substantial financial investment. It also requires robust marketing efforts to gain market acceptance. Unfortunately, not all projects manage to overcome these challenges successfully.

Let’s not overlook 

Often, businesses miss that the downsides of being unique can differ widely among markets. It’s not just about fitting in — credibility comes from various sources. How well a company uses these diverse credibility sources affects both its need to fit in and how its uniqueness affects credibility. This matters because what’s ideal for one company might not work well for another in the same market.

Important insights

The study made the following discoveries:

• Introducing a new idea without credible partners can be challenging.
• Having reputable partners boosts a brand’s uniqueness, but there’s a limit; after a point, more prestigious partners don’t add more value.
• In established markets, prominent partnerships are even more essential. So, if you’re entering a traditional market dominated by a few subpar players, without influential partners, success might be tough for a startup aiming to revolutionize.

Final thoughts

The Optimal Distinctiveness Theory provides a nuanced guide for startups navigating market entry and competition. Balancing uniqueness and conformity is the key, a balance that, when achieved, can drive a startup to success.

Yet, the path to optimal distinctiveness isn’t fixed, it requires continual adaptation and agility — qualities found in the most successful disruptive ventures. Context is crucial: what works in one market might not in another. Founders must grasp their unique offerings and comprehend the environments they enter.