Why Competition is Good News for Your Business

“First mover isn’t what’s important—it’s the last mover. Microsoft was the last operating system, and Google was the last search engine.”

 

Contrary to the belief of the vast majority of those who seek to be successful in business, competition is actually a great benefit to any company. Average entrepreneurs value their competition about as much as they value their in-laws, while experienced entrepreneurs understand that the competition is not the enemy. If you have a viable business, then you can assume that you have one, if not multiple competitors. If you have a promising idea for a business, then someone else has probably already thought of it. When you find another company doing the same thing you are doing, don’t panic. This does not seal the fate of your ambitious venture—in fact, exactly the opposite is true.

 

Competition is Market Validation

The first thing to recognize is this: The fact that businesses similar to your own have already sprung up means there is an active market for your product or service; you can now rest assured that an established need already exists for what you provide. Business owners and entrepreneurs regularly express the concern that they are not the first to introduce their idea to the market, and this concern is unnecessary. Venture capitalist Peter Thiel said, “First mover isn’t what’s important—it’s the last mover. Microsoft was the last operating system, and Google was the last search engine.” The existence of Myspace did not stop Facebook from destroying them. The widely-held notion that a great business starts with a unique idea is unfounded.

 

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Imagine yourself in your brand new office (which may well be your garage). The books are in the black, you’ve got committed clients, and you even have some furniture. You just begin to relax for the 5 minutes of free time you have in the day, when a partner rushes in to tell you that he has just discovered a company which is providing the very same product as your own… the competitor. Spinning out of desperation, you call your largest investor to deliver the news, expecting him to read the death sentence of your burgeoning business. To your surprise, your experienced investor does not appear worried, but instead he remarks wistfully, “That’s great news!” The veteran investor understands what few do: The presence of competitors only means that the demand is there. You’re in a good position.

 

The Hard Work is Already Done

The presence of competition is also a good sign that there is not only a market, but a large market for your product, which indicates a sizeable customer base that you never had to build. Talkroute, for example, was not the first company to enter the realm of communications, but it was able to utilize the consumer base of an already thriving $75 billion per year industry. More than that, since this particular market already has a large community of customers, they have been educated on the product. The only thing tougher than coming up with a good idea is convincing your potential customers that they should care enough to buy it. A competitor who has carried this burden for you is a great advantage because educating your market on a new product or service is extremely difficult and usually very expensive.

 

Are you seeing a theme here? What you should be worrying about during the very crucial startup period is not how to be entirely original, but instead how to use the experience, successes, and failures of your competition to build your own business. You have the opportunity to pick up where your competitors left off and to use their mistakes and triumphs to your advantage, which leads us to an important point.

 

Copy, Copy—Innovate

Your chances of success increase exponentially if you look at an existing concept, copy what has already been done, and begin to innovate only when you have a firm grasp of what has worked for others in the past. It isn’t sexy, but it works. You may be thinking, “Isn’t the goal to be BETTER than the competition?” If you want to be the only one in your boat without a paddle—suit yourself. But if you want to build a lucrative business based on reliable precedent and a wealth of knowledge provided by your competitors, then this is a strong formula to follow.

 

Once you feel that you are ready to innovate and mold your product into something that is distinct, keep in mind that whether or not a product is “better” is subjective, and opinions will vary wildly from person to person. The key is to be different. Being different is not subjective, and this can truly distinguish you from a competitor. Have you ever heard people giving each other all the reasons why their new iPhone is better than the latest Samsung device? The two devices both have similar functions and features, but each loyal customer is convinced (for possibly undefinable reasons) that their device is “better” than the other. These customers would agree, however, that the two products are different. It is for this reason that a startup that is based in a garage can compete with a fortune 500 company that has 1000 employees and a similar product.

 

Brass Tacks: Execution

So let’s talk about your idea. The most successful ideas are neither unique, nor even strongly grounded. A great idea is one that YOU can execute. Don’t take this the wrong way, but most of your ideas are crap. It will do you no good if you cannot follow through and make your idea work in the real world. The idea for Google was gold in the hands of Larry Page and Sergey Brin, but it would most likely have been a failure in yours because Larry and Sergey were the perfect executors for their idea. A subpar idea executed brilliantly will always be more successful than a great idea that was poorly acted on. Also, your idea will change and pivot as you strive to find your product-market fit, and it is during this process when you will have to improvise and adapt to ensure that your idea remains viable. Execution is everything.

Derek Sivers’ approach: ideas are just a multiplier of execution. In his model, the value of an idea is minuscule until it is multiplied by execution:

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Share Your Idea

After you have settled on a strong idea that you believe you can execute, it is time to talk about it. Talk about it with everyone. This may sound counter-intuitive and dangerous, but sharing your great idea with others is the only way to gain customer feedback and identify gaps in the market. Are you worried that someone is going to steal your idea? Don’t. Everyone has an idea. Very few know how to execute an idea, and those who are capable of executing an idea will not be concerned with stealing yours because they are probably too busy executing their own. If you feel that your idea is somewhat easy to execute, then you may need to take a step back. You may be entering an over-saturated market with a low barrier to entry, which may find you drowning in a sea of duplicate businesses. For my money, we can never have enough food trucks, but the crucial part is distinguishing yourself from the rest. Maybe your business is able to keep later hours or operates at the entrance of a train station, for example. Finding a differentiator will give you an edge over your competitors.

 

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The Smart Money is on Successful Competitors

543,000 businesses start every month. If you want yours to be successful, then you must consider the sphere that you will operate in. The important thing to remember is that your competitor is not the enemy. You are the competitor to your competitor, and even though the nature of the industry dictates that some businesses will defeat others, the fact is that we are all trying to succeed. Gaining your edge will not come from ignoring those competing with you, but from constructively using the knowledge and experience which is already available to you.

 

Bonus article on the benefits of having competitors:

https://talkroute.com/your-competitors-are-not-the-enemy-they-are-your-friends/

 

 
 

Greetings from the Talkroute Content Team!

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Why Competition is Good News for Your Business