The problem with competition is that it is almost always seen as a problem.
We’re trained to build business models and write business plans around our competition. We need to find our competitive edge and advantage and work hard to ensure we are #1 in our field of play. We view our competitors as the bad guys and make sure all our products and people are tied down with patents and Non Disclosure Agreements to make sure nobody else is able to create value from what we’ve worked so hard on.
This is a logical consequence of our individualistic society and the basis of our capitalist market. It is also an extremely negative way of perceiving your business and its competitors, it takes up a lot of energy and it creates barriers and distance in a world where I see more connection and relation is required and desired.
Let’s take a look at why I say competition is good and going even further, how we can move away from seeing competition as a threat but as an opportunity.
Why not all competition is indeed competition
Given the fact that there are over 7 Billion (!!) people in the world it is very likely that the overall market share for your product is a lot bigger than you might realise. Of course not all these people fall in the right demographic but still it is good to realise the grand scale of things and see the potential there instead of the limitations.
Let’s say you live in the Netherlands and you sell an online training on Lean Continuous Improvement (yes, this is me ;). The target group for this training is small businesses or employees of medium-sized businesses that wish to know and understand more of Lean. And perhaps even a few freelancers will be interested as it is a relatively cheap way to learn a new skill that can up their value. In the Dutch market alone this implies that there is a whopping 850.000 companies that could be potential customers. Even if I cut it in half because the topic does not apply to them or they already have Lean knowledge or whatever other reasons that still means that I’ve got a potential market size of 400.000. Given all the competition in the market I can perhaps reach 2% market share which gives me 8000 companies and freelancers to work with!
These 8000 companies will already give me enough work and income for a few years on that particular training alone! That means that I should focus on these 2% and be happy to let my competitors work with the others. How you define this 2% and how you target them is of course a whole different topic. Abby Kerr of The Voice Bureau does great work on branding and has written many great blogs on finding ‘the Right People’. I would also recommend subscribing to Seth Godin’s blog and reading some of his books on marketing and finding just YOUR right kind of audience.
In what way we can use competition to our benefit?
The amazeballs entrepreneur Richard Branson claims that instead of looking over your shoulder to see what ‘they’ are doing you should look forward and be pro-active in continuous innovation for your products, your services and your company culture.
You should be paying attention to your customer and what they are and are not doing. Looking at the Lean methodology this is such a logical thing to do and in my opinion the most important thing to do as a business at any point in your lifetime. Look at that what is seen as quality for your customers.
Listen to your customers’ feedback and complaints and turn that into the benefits and unique selling points you have over your competitors.
Sir Richard Branson also mentions that a big mistake many businesses make is to copy the business model from their competitors because apparently that is what is ‘normal’ in the market or working for customers right now. Looking at all those new businesses with innovative business models (Spotify, AirBnB, Uber, etc.) we can see that there is much room for innovation and that it is much appreciated by customers.
So if you’re starting up or have room to refine your business model it might be wise to take a good look at your competitors model and listen to their customers. Use that input to tweak your own business model and customise it to fit YOUR customer.
How can we leverage competition even more?
The Sharing Economy
Our culture is slowly shifting. It is moving from being traditional and linear (and perhaps even masculine) to being more social, circular or organic. With the rapid increase of the use of social media and new technologies we are now able to connect with people in a much faster and easier way than ever before.
As our mindset is shifting along with our experiences by using Uber and AirBnB for example we see the logic of ‘using’ each other instead of competing with each other. This new economy is based on the sharing of talents, goods and services, creating value for both our customers and ourselves along the way. Check out Lisa Gansky’s book in The Mesh: Why the Future of Business is Sharing. Or check out her Ted talk on this topic.
The Opportunities in this Economy
Translating this Sharing Economy back to our business and our relationship with competition we can potentially see some opportunities arise. Of course I am not saying you change your business model but mainly your perception of the market and the people and businesses you compete with. What I AM saying is that there are dozens of opportunities lying around if you just know how to leverage them properly.
Here are some examples, some of them you might already apply, others you may not:
- Lead generation. Knowing and understanding your customers has the benefit that you can sometimes say no to customers that are just not right for you at that point in time. Referring someone to a competitor will ensure the happiness of both the customer and your competitor what will likely be returned to you in the future. Good-old fashioned network economy at its best!
- Co-creating content and products. For those of you that are online entrepreneurs you probably already know the added value that working together brings. Not only will you broaden your reach and market but co-creating also spurs creativity and you’ll find that you can leverage each others’ strengths to both your benefit.
- Knowledge Sharing. Knowledge is such an important thing! Of course you don’t want to share your innermost secrets. Or perhaps you do, like Tesla did with opening up all its patents to everyone.
[quote align=”center” color=”#464752“]Tesla Motors was created to accelerate the advent of sustainable transport. If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal.I thought patents were a good thing and worked hard to obtain them. And maybe they were good long ago, but too often these days they serve merely to stifle progress, entrench the positions of giant corporations and enrich those in the legal profession, rather than the actual inventors.We believe that Tesla, other companies making electric cars, and the world would all benefit from a common, rapidly-evolving technology platform.[/quote]A fantastic example of visionary leadership and a revolutionary new view on competition by Elon Musk!
- People sharing. If you’re a small business and you have some great employees with specific knowledge and expertise you might want to keep them close to you. But if you’re co-creating with other businesses in the field or if you’re part of a larger value chain it might just be beneficial to you and your business to share some of your best people. For example, you have a great SEO marketeer in-house that you ‘borrow’ to your peer for a week to help optimise their website. In return you get their Lean expert that helps you structure your business a bit more and set up your KPI’s. You both learn, you both grow and you both benefit without it costing you anything apart from time.
What are obstacles you and your company will need to overcome?
Whatever way you choose to participate, this way of doing business is based on trust, transparency, authenticity and human connection and relationships. For this to work you will need to rely on others willing to share but you need to be willing and trustworthy as well.
You will need to be a trustworthy person and brand and you will need to be able and willing to invest in long-term relationships instead of going after short-term wins. You will need to potentially overcome envy, jealousy, fear of failure, your projections on money and your ambitions.
In fact, for this to work you will be required to compete more with yourself than with others which, according to Seth Godin, is more difficult, requires more bravery and leads to more insights.