Every great story stems from stacking the odds against the protagonist; they strive and overcome the odds to beat out their competition. A word that carries a weight so great, but often lacks in depth. Competition: it is a term that is thrown around in pitches and business plans, but rarely ever explores the depth of what it holds. Unbeknownst to entrepreneurs, they peer out at a landscape and assume competition is lacking or absent. They create an over-optimistic and courage-driven mindset, which I urge caution. Supply and demand 101: to supply, there must first be a demand. Competition is not a sign to stop or move out of the way. But, it can be an indication to not slow down and step on the gas. This article is here to tell you how competition benefits you.
First, understand competition and substitute competition. Competition are direct competitors in your industry delivering your service or product in the same manner. This is elementary in business “talk,” this is the grocery chains or cell phone services, and the Ford vs Chevy; it is the welcomed definition of “competition.” I challenge you to find the substitute to your solution. Take the problem you are trying to solve and ask yourself, “what are consumers or clients doing now to fill this gap?” The answer may be a direct competitor, or it may be a DIY solution that industries have welcomed and accepted. For example, a few years ago I consulted a Salon chain. The salon spent their efforts competing in their market with other salons, but ignored the entire substitute market: the at-home stylist. Instead of leaving them on by the wayside, we found their barriers and broke them down to bring them in. However, many times it is not this easy. A past client of mine, a business professional, hated how his phone was always drained and never had a place in the car as he traveled. He chose to develop a device that filled a cup holder and docked a phone. Knowing no cup holder docking system existed in the market he chose to double down and push forward. The problem was the substitute market was simply placing a phone in an enclosed cup holder.
Sometimes competition does not exist for a very good reason: your solution is a mere mimic of what a market has already accepted as a solution. If you are truly solving a problem, then the market is doing what it can to solve it. Make sure your solution excels in performance over the current haphazard solution.
The next most annoying thing I hear is, “they already did it” or “that was already done.” When I hear this, what I really hear is the underlying message “there is a market for this” or “they are missing an opportunity.” Stop negating your ideas because there is some variation of it in the marketplace. I find competition a great thing and opportunity: they are working for you. They have established a market, consumers are supporting it, and you use your competition as data points. Study their customers and market moves and migrations. This takes a great deal of the guesswork out your pitch. Maybe the solution is only being used by a specific demographic; find out why another demographic is not using the current solutions and exploit it. Become a customer of your competition. Yes, pay money, subscribe to their service, call customer service, and gather information as a customer. You will have the unique opportunity to see what they lack and what they excel at from a customer’s point of view, the most important service. You will learn what you hate and cut it; as well as finding what you love but, most importantly, you are looking for blind spots. Blind spots are areas your competition have chosen to ignore or are unaware of completely: a point of differentiation.
Competition is not scarce for any new venture. It may be direct or substituted in numerous ways and the objective is to find competition. Frankly, an idea that does not have competition in any perimeters may find itself in an empty market; not enough demand to support a brand. Use your competition to learn from and find opportunity rather than shy away. I truly believe in the forward progression of ideas and solutions, which is only done by assessing current conditions and not letting ego drive your endeavors. The market is true; they decide who will live to see another day and you cannot afford to ignore this reality. Competition is an easy term to throw into a pitch deck but truly understanding competition is key to understanding a market and the opportunity that exists.