Competition is a good thing. It’s shows there’s a market and “it keeps you on your toes”. However its very easy to become completely obsessed with your competition. An obsession, particularly one which dominates your thinking, is never a good thing. It ends up wasting time, energy and is very frustrating. The thing really to focus energy on is understanding and adapting to your target customer needs.
- Price – Since the Web everyone can see each others published pricing. There’s pressure to be cheaper than your competitors because customers can so easily compare suppliers. Remember customers don’t just buy on price.
- Features – The Web has also made it simple to compare suppliers features. You can become obsessed with needing every feature your competitor has. It’s so easy to forget the customer when focusing on competitors. Understand which features customers really value.
- Size – How many customers do they have, what is their market share, what are their revenues, etc. Becoming obsessed with competitor size is very destructive. It leads to land grab at any cost. Remember the saying “volumes are vanity and profit is sanity.”
- Buzz – Being obsessed with your competition means your always waiting and watching for every piece of press on them. Great press coverage is important but its the customers perceptions that really counts. Lots of press noise does not necessary mean lots of happy customers.
- Location – Over and over I hear people obsessing about location. They constantly compare the benefits of being is a different location. Usually one they’re not in. Don’t get me wrong location is important but getting hung-up over it is no help. Customers are everywhere. Focus on them.
Our startup has got more competition than you can shake a stick at! However it is vital we have competition. They validate the market need and help to grow the overall market sector through a courus of marketing messages. Competitors give a startup a known quantity to position a product against with customers i.e. ‘it’s like…’ They also bring a measure to set yourself against.
However becoming obsessed with your competition is counter productive. Forgetting about them is not a good idea either. They may start addressing a customer need which takes away your customers. In reality it is unlikely your competition which will kill your startup. There are lots of other challenges that will do that, especially not understanding adapting to your customer needs.