Industry giants, beware! These smaller rival – an online clothing retailer, a maker of green cleaning products, and a business software maven – are on the rise.
By Jessica Shambora, writer-reporter
Bonobos vs. J. Crew
The challenge: Beat preppy retailer J. Crew (JCG) at its own game by selling better-fitting men’s pants and blazers online.
What they did: Bonobos founder and CEO Andy Dunn and co-founder Brian Spaly were MBA students at Stanford when they started selling pants out of their backpacks in 2007. They promised guys “a better fit”: slim enough to look good but loose enough to be comfortable. The pants were a hit with fellow students, who invested in Bonobos so the business could go online. The approach allowed Bonobos to avoid the costs of a standalone store and offer a wider range of colors and sizes than could be stocked on a store’s shelves. The Internet had other advantages, too, like low-cost marketing via social networks, new product testing, and storing customer measurements for future orders. New York City-based Bonobos claims it will reach $8 million in sales in 2010, up from $5 million in 2009.
Method vs. Clorox
The challenge: Rivals want a piece of the green-cleaning craze. How does this eco-friendly pioneer fight back? Innovate.
What they did: San Francisco-based Method arrived just in time for the green revolution. Founded in 2000 by childhood pals Eric Ryan and Adam Lowry, this line of cleaning goods produces annual sales of $100 million and is stocked by big-time chains such as Lowe’s (LOW) and Target (TGT). The founders say they fend off the mainstream cleaning-product makers by keeping one step ahead. Case in point: a concentrated, plant-based laundry detergent in a package slightly bigger than a half-liter bottle. Method’s superb product design also helps set it apart from the likes of Clorox (CLX). Fans praise the creative scents like ginger yuzu, and the bottles’ teardrop shapes are worthy of display on kitchen counters. This writer’s take? Method makes cleaning more like a luxury than a chore!
Pegasystems vs. Oracle
The challenge: Oracle (ORCL) dominates the business software industry. Why should anyone take a chance on an upstart?
What they did: Pega’s sales of $264 million barely register compared with Oracle’s $26.8 billion in revenue. So how does Pega founder and CEO Alan Trefler win business from clients like J.P. Morgan Chase (JPM) and New York Life? The Cambridge, Mass., firm is the leader when it comes to business process management software. These computer programs save companies millions by automating complicated, labor-intensive tasks. For instance, Pega built software for an automaker that enables computers, instead of people, to do most of the work when warranty claims are filed. Pega beats rivals by giving clients what they want: purpose-built software that is simple to use and flexible enough to adapt to their constantly changing businesses. The results: 12 consecutive quarters of record sales.