Starting a business is daunting, you’re up against a plethora of competitors who could easily squash you or steal your idea. If you’ve said to yourself, “I have no competitors, we’re first in the market” you’re probably not doing enough market research. I’m willing to bet there are at least 15 other companies globally working on the exact same solution — some of them may still be in ‘stealth mode’ like you, which makes them harder to find.
The problem is, too often entrepreneurs focus too much on the competitors that they fail to pay enough attention to the market. With that being said, here are five things you need to pay attention to when thinking about competition by our Head of Growth, Chin Hing Chang.
1. Map Out the Competitive Landscape
Research, research, and then do some more research. Ask questions such as:
- What competitors have come before you and why did they fail? How will you be different and avoid their mistakes?
- Who are other competitors that might move into your space? How would you react to that and defend yourself?
Differentiation is not necessary on day one but in an ever increasingly noisy marketplace stuffed with competitors, it is crucial to the survival of your startup. Ask yourself, what sets you apart from your competitors? How can you defend yourself from competitors?
Typically, differentiation falls into one of four categories:
Product: Your product itself has to be significantly different (not just “how” you do it)
Market: Access to channels or communities that your competitor might have difficulty accessing.
Sales: When a founder or founders have specific knowledge of the market and are able to more readily sell to the market than their competitors.
Business Model: How you charge the market and gain revenue is different and proven to improve conversion from what your competitors are currently stuck doing.
3. Imitation is Inevitable
“Imitation is the sincerest form of flattery that mediocrity can pay to greatness.” — Oscar Wilde
The best defense is building a reputable brand or community around your startup. Be known as the industry expert for something. So what if they copy you? You can copy them too. Just make sure you’re different and strive to be better.
4. Make Friends, Not Enemies
Who knows, down the road, you might acquire them or they might acquire you. You might realize you have common goals and decide to partner to cut costs or service a particular client in different ways. For example, Spring Alumnus, Leverage Lab, believes that innovation comes from getting businesses to work together to create lasting change in our community. When we put our heads together, we can do greater, better things for our businesses and our communities — not at the expense of profit, growth, and productivity.
5. Win With Your Long Term Plan
Only you know the direction which you will take your startup, how your product will evolve. What you launch in the marketplace will never be the only or final product. When Hootsuite launched, there were 18 other identical Twitter dashboards in the marketplace. A month later, there were 40+ other dashboards doing exactly what they did, they came out top because they had a plan for differentiation and that’s something that can’t be copied.