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The subject of competition can be very polarizing. Many of the world’s most successful professionals claim to be obsessively competitive, almost to the point of failure. The reality is that if you start a business and you plan to grow your business, you will eventually meet someone who had or has an idea that is very similar to the one you can think of. In fact, there are probably 20 different articles on the subject of competition competing for clicks with this one!
So how should we as entrepreneurs think about our competitive landscape? Here are some of the observations I made as I struggled with our competitors while building my business:
Related: How to Stand Out from the Competition
Contents
1. Don’t ignore it
When starting something new it is important to do a full market scan to understand what and who you are dealing with. Determine your market and list your direct competitors, enemies and companies that are one or two steps away from direct competitors. Find out how much they raised, the depth and breadth of their product offerings, and the experience of their founders and team. Use tools like Google Trends to understand the key terms that are popular and highly searched for in your category to help determine your positioning against your competitors.
If you can’t find at least three competitors in your space, that’s usually a pretty bad sign. It is rare to be the first and only product on the market. In most cases, entrepreneurs who claim to be “the only product” on the market are still looking for a real market and a problem to solve. Unless you have a unique insight with real customer traction within a category you are creating, it is usually easier to innovate and disrupt established companies in an established category with a known problem and a defined buyer profile.
Often, entrepreneurs are hesitant to disclose information about their company or the product they are building. In reality, your incumbents, especially large incumbent suppliers, don’t care what you’re building. You can literally call the lead product manager who is working on a product in your space and share your business with them. The chances of them doing anything with the information you share with them are very slim.
Large companies have created roadmaps that are difficult to adapt. Even if one of your established competitors wanted to compete with you, it would have to shift resources from its current priorities to do so. We even went so far as to publicly publish our roadmap for customers and potential partners to see when and how we prioritized. That actually became an opportunity and a moment for us to relax our position and focus.
As we built our business, one of our direct competitors immediately signed up for one of our free trials. They even took a potential “partnership” call to get information and information about our company. Two years later, that same company came back to us and offered to take us over for a generous multiple of our earnings. In short, it can work to your advantage to share MORE with your competitors. Established competitors may realize how far behind they are in your category and make you an acquisition offer to accelerate their roadmap or expand their team.
Related: 3 Reasons You Should Be Spying on Your Competition
3. Don’t be a hole
As markets heat up, competition can become fierce, especially if there is a narrow window or if there is an opportunity to grab land to establish yourself as a category leader. In the heat of the moment, it can be tempting to talk about your competitors in a shared sales cycle. Do not do it.
It’s okay to emphasize the differences between your product and your competitor’s product, but do so in a way that elevates both positions while strengthening your advantage. For example, if you’re selling to a corporate customer segment and speaking to an SMB customer, it wouldn’t hurt to refer that prospect to a competitor focused on selling in a down market. Not only are you showing that you genuinely care about the product that’s right for that customer, but you’re also showing that you DON’T NEED their company. Trust is cool.
Choosing to throw rocks at competitors suggests that you are overcompensating for something. Prospects can smell despair from a mile away, and that smell can carry over to future sales opportunities if you let it. Most importantly, do not disparage your competitors in written form. I’ve had multiple prospects forward me emails from my competitor’s founders/CEOs with all the obvious flaws in our product and company.
Not only did this great bulletin board material motivate our sales and product teams, but it also helped us discover a new market opportunity that we hadn’t considered and that our competitor started selling successfully. We were second to the market with this product; However, we outperformed and eventually won the category, thanks to the insight of our biggest competitor.
4. Don’t let it consume you
Competition can be addictive. The highs and lows of success and defeat make the game of entrepreneurship fun. It can also be incredibly humbling, especially when we’re on the losing end of a competitive selling scenario.
Related: Don’t Declare War. Respect competitors and take advantage of your own strengths.
I’m not suggesting that our marketing teams lay down their battle cards or that we stop arming our sales teams with the resources they need to set “land mines” for competitive selling scenarios. However, your competitors are one point of data that can help inform your understanding of the market you operate in. Use competition as an accelerator for your own learning and self-improvement. There can be (and will be) multiple winners in a category. This is confirmation that your category is growing, which in turn draws more attention to the space you are building into. Don’t run from it. embrace it.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.