Business is often compared to sports. You hear of someone hitting it out of the park or the slam-dunk opportunity. When you need to get back to the basics, it is often blocking and tackling. And who hasn’t had to develop a game plan for the upcoming budget year. But one thing that sports has that business doesn’t always is a clear opponent. Sports are all about the competition. Business, too, is about competition, but the opponents are often hidden.
Often, I have read business plans where the entrepreneur states that there is no competition for his particular venture’s product or service. If I am judging a business plan competition (there’s that word again), I automatically downgrade a couple of points. If, I am a mentor to said entrepreneur, that begins a longer conversation about the business.
My friend Jeff, the marketing strategist, likes companies to develop “Only” statements. As in, the widget is the only product that will wash your floors and leave your mouth minty fresh. I’m kidding, but Jeff is serious. In marketingland, it is critical to explain why your product is the only way to get things done. But from the other side of the fence, we understand that while we are the “only” X, our prospective customers also get to decide what is important to them and there are others out there who have something to say about their products.
Let’s face it, there is always competition. A few examples…
What about Microsoft, back when it was a tiny company? There is the oft told tale of how Gary Kildall, founder of Digital Research was a strong competitor to Bill Gates’ early efforts at Microsoft and lost out on the original IBM PC operating system contract because he wasn’t willing to sign the IBM non-disclosure documents. Had Gary Kildall signed the contracts, no one would have heard of Bill Gates or Microsoft. Instead of Windows, we might be using GEM.
But, really, when Henry Ford started making cars, he had no competition. Not so fast. Henry Ford had lots of competition. Besides the other automakers who were building cars on a custom basis, there was always the horse and buggy. People did not really need the automobile. Remember that “do nothing” is always a competitor in the minds of your potential customers. What Henry Ford did was change a manufacturing process for a product that had already been in the market.
OK, then, how about Segway. Dean Kaman built a product that no one had ever thought of. It was an entirely new product and how could there be any competition? Ah, but the competition was there, it was just disguised. Let’s see, people could walk (buy nothing), purchase a bike, hybrid car, roller blades, scooters. It depends on how they were looking at the problem. In actuality, the competition was what led to a less than successful introduction for the Segway and why they are still looked upon as curiosities, rather than a mainstream transportation choice for consumers.
I believe that you have to be honest with yourself when you look at your business. There is always competition and you have to be ready to confront it. Don’t forget about “Do Nothing” as a competitor. Look at alternative uses of other products and how your product may be viewed in the marketplace. In fact, if you can honestly say that there is no competition for your product, I would question the value that the marketplace has for your product.
So, if we can agree that in order for you to be successful, there will be competition, then how can we develop strategies that will further your business idea?
First, we need to realize that competition is good. In a way, competition validates the marketplace. If others are selling into the consumer base, then we know that the consumers are able to purchase to solve their needs. This gives you an idea that people may also buy your products, if they are marketed, produced and delivered with care.
Second, competition will force you to raise the level of your game. You have to understand the marketplace and react to it on a regular basis. This will hone your product offerings to be as good as they can be.
The one thing that I would emphasize to companies facing direct competition is, don’t play the other guy’s game. Change the game and make him play by a new set of rules, if at all possible. Going back to the Henry Ford story, this is his true genius. He was able to change his manufacturing process to lower the cost of the first mass produced automobile. The consumer really didn’t much care that it was mass produced, but suddenly the price for an automobile was not a stumbling block and Ford was able to literally change the world.
For you, look for ways to change the game as well. Maybe there is something that you can bring to the table that doesn’t cost you much, but the other guy hasn’t cottoned on to. Put your emphasis here. Go to your customers and let them know about that extra special feature and try to get it written into specs. Understand what is important to your purchasers. Is it value, couture, large portions, safety from lawsuits? Whatever it is, if you can provide it and your competitor cannot, you have a better than even chance of (sports metaphor coming…) landing the big one.
But, if you are successful, be aware that the circle has a way of coming back. Look at Microsoft and Google today. It’s all part of the game of business. Real entrepreneurs don’t shy away from the competition, they look for ways to compete on the playing field.