Whatever the competitive landscape in your market, you must accept it as the only landscape worth traversing. Competition can become the lifeblood of your business, inspiring change, freshness, and innovation. Ignoring your competitors, by contrast, will drain the life out of you—often without you even knowing it.
Where do you and your competition stand? If, upon concluding your market analysis, you find that you have no competitors, think twice about your business idea. Why isn’t anyone else doing it? Are you really so smart that no one else could have possibly come up with the same idea? Dig deeper. Perhaps someone has already tried your idea and it didn’t fly. Be cautious and intelligent about when you enter what landscape. If you dive in anyway and then get asked to tango on a trampoline, it’s hard to back down.
One drawback to entering a sparse environment of competition is the need for a longer, more expensive ramp-up phase. You have to break your own trail. You will have no competitor to help you advertise your product. There will not be an established channel of marketing and consumption specific to your brand-spanking-new idea. Building new channels and pioneering marketing campaigns can be done, but you need to recognize the associated costs.
On the other hand, having a competitor or two gives you access to banks of information. You will not likely get direct access to your competitors’ databases of customers, cost structures, or product development secrets, but for every company you compete with, you will find administrative assistants, other customer facing employees, and both happy and dissatisfied customers—all who will be willing to talk.
Most people are excited to chat about what they do. They like to brag about their company’s innovative products and who their big-name customers are. Use this knowledge to build a better mousetrap. What about your competitors’ product or service is broken? How can you take advantage of what has already been done? Being willing to follow the lead is often more profitable than leading out.
This concept fits with the section on “abundance mentality” found in chapter 12, “The Heart and Head of the Entrepreneur.” Recognize—and, if necessary, make yourself understand—that there is plenty to go around. At times, it’s even a good move to let your competitors get to market first to make the mistakes for you. Learn from those mistakes and clean up! This is the idea of drafting—like how geese draft off the ones in front, or how the second- and third-place race cars draft off the leader.
Our latest venture places us in the highly competitive and rapidly changing online search engine world. This market is complex enough that no one individual or company can keep up with the ever-changing landscape. Success requires a level of openness and sharing within the industry brain trust. There are several individuals in our industry that thrive on discovering amazing new strategies. We directly benefit from drafting off the learning and creativity of our competitors.
You too can take the more profitable tack of learning from other companies’ mistakes and taking a more profitable slice of the pie. Some argue that beating everybody else to market is absolutely critical. If you are going to get to the market first, simply prepare yourself to adjust, improve, and change as your competitors begin to poke into your market share.
Porter’s Points – Competition Is Good
- If nobody is in your market, ask yourself if there really is a demand for your product. Is the demand sufficient to give life to your business? How will you create a market that doesn’t exist? What other products and services can you offer? Do some careful investigation before diving headfirst into an empty pool.
- The way to your competitors’ customers is through the employees who interact with the customers and through the customers themselves. Contact these people and ask them about what they do. Take careful notes on how you can improve.
- Reread the section on having an “abundance mentality” from chapter 12. Really commit yourself to believe that the market is big enough for you and the competition. Let others test the waters a little, and always, always learn from your and their mistakes. Use those mistakes to look for openings and then take them!