15 Nov Dealing With Competition In Your Startup Business
Starting a business is many things – exciting, daunting, tiring, and a whole host of adjectives that underline what a rollercoaster it can be. One of the adjectives that most people would reach for when describing the startup process is “challenging”. You can have a good idea in your head of what to expect when starting a new business, but let’s be absolutely clear – you’ll still run up against challenges you weren’t expecting, and you’ll need to deal with them in good time.
One of the key challenges for any business is how to approach the matter of competition. You’re likely to be competing with other providers for a slice of the pie, and that is going to affect how your business can operate. Understanding how their presence affects you, and what you can do about it, is going to be one of your most enduring challenges as a business owner, and it’s essential to get a good idea of what you’re looking to achieve. That means knowing some of the following information…
You must know who you’re dealing with before you start
The presence of competition isn’t a signal that you need to rip up your idea and start again – having a competitor doesn’t mean there isn’t space for your business. For example, we can all name two iconic brands of cola. The fact that they are direct competitors has not stopped either from becoming a global business giant. The presence of a competitor can be good for your business mettle – but you have to know what you’re competing against. If you launch a startup coffee shop and your USP is that you use Fair Trade ingredients and non-dairy milks, then it’s important to check that there isn’t already a coffee shop with the same USP.
The absence of competition isn’t (necessarily) a positive sign
You may be delighted by your idea for a business and enthralled by the relatively open market space into which you are launching it, but having no competition is a reason to pause for thought. You know in a horror film when one character says “it’s all gone quiet”, and another says “yes, too quiet”? Well, business can be a bit like that – you want there to be some activity. The absence of someone else doing what you do might be a sign that your business is desperately needed. It might also mean that there hasn’t been demand for a business like yours and you’ll struggle to get buy-in for it now.
Your primary focus should be on you
Good competition drives you to be better. That’s something you’ll hear all the time in the sporting world, where often the greatest threat to success is complacency. So your business competitors should be a reminder to aim high and set the standards, but at the end of the day they need to be your standards. If you’re trying to outdo a competitor above all, it will warp how you approach your business. Think about how you can learn from a competitor, think about how you can set yourself apart, think about what you’d say to them if you got the chance to negotiate your acquisition of that business in the future. A friendly rivalry is good for business – a clash of egos is very bad, and unprofessional.
Your ideas WILL be stolen
Early in the piece, we noted that everyone can name at least two iconic cola manufacturers. Now, if you look at those manufacturers and their historic list of products, you’ll see a few things. They both started to produce diet colas at a certain point, then they began to produce caffeine-free products. They have also both produced cherry-flavoured colas and clear colas. These businesses did not come up with those ideas simultaneously: one had and produced the concept, the other decided that they would also produce something based on that concept. Neither side ever sued for theft of intellectual property.
This is to point out that if you have competitors, you will need to get used to the idea that they will, from time to time, take “inspiration” from a product you have created or a service you offer. You can spend some time getting annoyed at this, or you can be flattered that they copied you, put the word “original” in your product name or description to highlight the fact, and then also take inspiration from any future ideas they have that you wish you’d had. Taking time, of course, to improve on their original concept.
Aim for a positive relationship with your competitors
Earlier, we noted that you should not turn any rival into a sworn enemy, because the more time you spend fixating on their efforts, the less you spend on your own ideas. You should, in fact, go a bit further than not seeing them as an enemy. Look at them instead as a fellow provider in your sphere, aim for cordial relationships with your opposite numbers, and allow the possibility of collaborating in the future – especially if you specialise in differing niches within your industry. At some point, it may be beneficial for you to work together, and to lobby for interests that go further and wider than your own company.
As we also noted, the day may come when you’re looking to merge your companies, or acquire the other, and a smooth relationship will make that process a lot easier. If you have the pursuit of excellence in common, that’s far more important than any disagreements you may have. If you have approached things in the right way, you and your competitors will have made one another stronger through the years.
All in all, if you’re going to be successful in business, you will have competitors at some stage, and it’s never a good idea to run from competition. If you look instead for ways to use that competition and make your business stronger, you’ll reap the rewards for the foreseeable future – and who knows, you might even find that you end up working together with your rivals in the future.