Rule #19 – Competition has nothing to do with success.

I was doing an audit of the competition that exists for a new startup I’m working on and I was shocked to see how many players there are now in the space.  When we started, it seemed like there were 3 or 4 big, established brands and then a dozen or so small entities that were middling about, not really doing much other then treading water.  Now, it looked like there were 7 or 8 established competitors and 30 or more smaller upstarts (ours included) trying to enter the fray.  Worse yet, the new upstarts appeared to be working with a purpose and a plan.   Some of them even looked like they were making some headway.

At first I was disheartened, thinking that the challenges we would be facing were now going to be much harder then they were a year or two ago.  However, nothing could be further from the truth when it comes to evaluating the quantity and quality of your competition and your marketplace.

The fact is that every marketplace has lots going on and lots of people working in it.  In the very rare event that you enter a market or field with little competition, you can be assured that the moment you demonstrate that you can make money in that industry, someone else – a lot of “someone elses,” actually – will quickly come along to fight you for those dollars.  Happens every time, no exceptions.  Even markets that have a clear leader (Online video – YouTube….Search – Google…) are crowded.  Frankly, they become more crowded more quickly then markets with no clear leader.  Why?  Because of what I said before: demonstrate you can make money in a market and someone else will enter it.  In the case of the examples listed, if you demonstrate that you can make A LOT of money in a market, everyone with a pulse and a PC will try and enter it.

As such, you really shouldn’t spend any time worrying about the other guy.  For starters, there is absolutely nothing you can do about it.  You can’t control how they work, what they offer, and how customers respond to them.  You can’t control their business model or cash flow or anything about them.  Even worse, the time you spend worrying about the competition is time taken away from the only thing you can control: how your business runs.  Don’t do that.  At all.

The thing that will make your company and product successful are you and your staff.  Your execution.  Your deployment.  Your customer service.  Your updates and upgrades.  Your pricing strategy and the value you offer.  Do those things well and you have a good chance to succeed.  Do them poorly and you are toast.  Your competition has NOTHING to do with that.

The rules of business are pretty simple:  offer a product at a price equal to or less then the price at which a customer values that product and you will generate revenue.  Offer a product at a price that the customer does not agree with when making spending decisions, and you will fail.  2 + 2 = 4.

You will always have competition.  Most of the time you will have more competition then you like, and some of the time you will think that the competition is too great for you to survive.  That said, always remember that there is absolutely nothing you can do about it and you are wasting precious time every moment you think about the other guy, because he’s probably not spending time thinking about you.   He’s working his tail off to improve what he can control about his own business…which is exactly what you should be doing.

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