One of the first things I do when I consider executing on an idea is conduct searches to seek out who the competition is. I don’t stop until I find at least 10 companies that look like they have revenue and history, expanding the definition of my idea until I can get to at least 10.
January 18, 2016
Why You Need Competition & What To Do About It
Find It, Learn It, Love It
Then I watch, and keep tabs, and learn.
Once you get underway, you probably won’t see any new competitors coming until they’re already well established. Your first reaction will always be concern. Get over that quick.
As the story goes, I first started ExitEvent because of my frustration that there was nothing out there like it. ExitEvent didn’t start out as a business. It was more like “Here. I think I fixed this broken thing. Does this help?” And I got a resounding yes.
Almost immediately, there came a wave of revitalized startup events and new startup-related websites and organizations. Now, let me state emphatically that in no way do I think ExitEvent started this wave, I just happened to execute in the right place at the right time. But suddenly I found myself in a sea of competition.
That was fine with me. As far as I was concerned, the more energy that went into promoting startup, the better. It also turned out to be exactly what ExitEvent needed. It made me sharpen my focus on the original idea—make it easier to do startup here—and differentiate based on that.
Competition is great. You need it. You just have to stay ahead of it.
Your first release is easy. There’s an initial rush and curiosity that creates a lot of false positives. But you have to get past this to survive.
As a more pedestrian example, I was never more concerned about an audience showing up to an American Titans show (my rock band) than our second gig. Our first was awesome. I knew the second would be different, because it was just two months later and we had no additional hook to throw at people to get them to come back.
I learned this from startup, that most people will try something once out of curiosity, even pay for it, and praise it for its newness. Those same people will not show up the second time without a very good reason.
We thought about leather pants. Wives quickly vetoed that idea. Thank God.
Another sorta-startup-related example that helped crystalize my thinking. This second-time enthusiasm dropoff was also common for writers who worked for me at both Intrepid Media and ExitEvent. New writers or writers working under a new byline got all their friends and co-workers to read their first article and social it up and comment on it and make it a really big deal.
The majority of those same friends and co-workers didn’t read their second article. The bright side was that the readers who were left became the foundation of their audience. In order to survive, they had to build a base outside of their network. You have to keep innovating. You have to keep building on your ideas. Or people will move on to something else.
This got me thinking. The same rule should be in place at every startup.
You should always be planning two versions of your product—the version you’re working on and the version that’s next—and that’s it. For the version after next, Version 3, you should have a list of new ideas that solve new problems related to your original idea, and you should be ready to completely pivot.
Too often, entrepreneurs will take the easy way out—to say, “Well, for Version 3, we’re going to build a better version of Version 2”—and so on, as incremental improvements are made to solve the same problem.
Don’t. You’ll get lapped.
Essentially, you get two shots to capitalize on and perfect an idea. By the time you’ve executed that second shot into the market, the competition will have caught up.
Think about the iPhone. You have the iPhone 6, which introduced a slew of new features. Then you have the 6s, which hardened and expanded upon those features. If the iPhone 7 doesn’t expose a bunch of brand new ideas, then Apple loses ground.
Don’t forget, Microsoft and then BlackBerry owned the first smartphone market. While they were perfecting the solution for reading email away from the office, Apple went out and crammed a phone into their iPod. The other two never recovered.
You need to feel the competition running you down, because you need that pressure to innovate. Innovation for innovation’s sake is a loser until it’s focused like a laser at the market, and an easy way to do this is take cues from your competition. What are they doing right, what are they doing wrong?
You don’t copy them, but you keep them from copying you.
Competition also raises the profile of new initiatives or new industries. At Automated Insights, we never love being lumped in with our competitors, but the more companies that spring up automating content, the more legitimacy automated content receives, and the easier it is to explain and sell our product.
We just need to remain consistently ahead of everyone else. That’s why you start a company in the first place.
But being better isn’t good enough. Disruption doesn’t mean just being the best. Nor does it mean being cheaper. Nor does it mean focusing on a niche customer segment (Facebook for Plumbers).
It means new. It means doing things differently. It means solving that first customer problem elegantly and affordably and then solving the next biggest problem related to that first problem. Immediately.
So cozy up to your competition, use their products, learn from their mistakes, and then keep them in your rearview.