Leading Entrepreneurship

There is not one company, anywhere, that sells to everyone. And, as it turns out, your firm will not either. Most will do just about as well as everyone else, no better, no worse.

This seems to makes sense when said about other people’s businesses, but somehow we tend to lose perspective when it is our own. We like to think “nobody has done this before, so I should own the market” and “I have no competition.” We’re wrong. Period.

Competition is everywhere. If consumers don’t have access to your product, they are making due, or creating their own solutions (like using Excel instead of buying QuickBooks). Or worse yet, after you present your solution and get some traction, others will be encouraged to present their solutions as well (like Blu-ray overtaking DVD). The point is, you will always be competing against something or someone.

Assuming for a minute that you actually had no competition. Now, how would you communicate with everyone? Google? Google only process half of all US searches. Of those that might search in an attempt to find your product. Of those that have access to the internet. Of those that search in English. Of those that are interested in your stuff to begin with.

One of the most misunderstood concepts in business would have to be competition. There is direct competition, indirect competition, substitutes, location-specific competition, online competition, global competition, mom and pop shops, and, of course, the 500 pound gorillas (the biggest competitors in the industry). Competition could come from one firm or hundreds, changes in the economy or changes in social trends, new products or new uses of existing solutions.

So, how should your growing firm view competition?

To clear the air, ignoring competition is not the answer.

The real answer is to view competition as relative to you. This means that your competition should be defined simply as a constant struggle to be most novel and beneficial to your most targeted customers.

That being said, sometimes this is a relation to your local competition, like for plumbers, restaurants or healthcare providers. Sometimes this is a relation to every imaginable solution, like in the software, media or manufacturing industries.

Determining exactly how you geographically relate to your competition is step one. As in identifying where your market is located, determine how geographically dispersed your competition is. Where does your competition “live”? Are they located in a 5-mile radius of you? Are they in your same county? Same state? Are they regional competitors? Are they located all across the country? Even internationally?

The more broad your base of competition, the more novel and beneficial you have to be, for your own special pocket of the market.

That leads us to step two. How is what you do novel and beneficial, relative to that competitive group? This answer may not always have to be new, but must always be unique, important and useful.

Note that your analysis based on to these questions is relying on constantly moving targets. And it is acceptable to have a continually modified answer. These tweaks and reassessments are what business strategy is all about.

Competition comes and goes. Markets change. People respond to new forces. You will have to respond, or face being left behind.

By the way, since competition is a given, there is only one way to deal with it. Embrace them! Yes, even if you don’t like them, they are your partners. They will be bundled together with you in the client’s mind. They will be your travelling buddies.

Respect your competition, even if you don’t like them. Competition drives you to be better, so let them push you. Thank them for it. Competition forces you to reassess, so do the work. Thank them for it. Competition educates your potential clients, improve from those lessons. Thank them for it.

Your competition simply being there allows you a stronger position in the market. Take it and run with it. If you do, a strong competitive analysis might be something like “our competition are the primarily regional accounting firms that serve the greater San Francisco bay area, where we have the unique position of providing services only to startups, answering the planning challenges they face as opposed to the maintenance, support and auditing service that is currently available in the market,” which is much better than “nobody currently does what we do.”