Redefining competition in the era of innovation30 December, 2014 / Articles
We recently discovered that a competitor in our market was buying our company’s trademark with Google keywords and making an untrue claim against our product. It created a burst of shock and anger in our offices and led to some back-and-forth drama. But after handling the situation and stepping back, we realized that this was a futile effort that completely back-fired on the other company. In this new economy, the nature of competition is being redefined—and entrepreneurs must reset their views.
Clients, partners, investors and job prospects frequently ask for a list of our competitors. It is a natural way to try to size up a company, and in business we are naturally competitive. I started my career in large companies where we constantly fought for share of the same pie. I will never forget my first job in banking, when my competitor stole my largest client with a free lunch and lower interest rate. On the Tide brand at Procter & Gamble, we obsessed over every basis point of share shift.
But competition is vastly different when you are working in new and innovative markets. Instead of fighting over the same territory, innovation allows you to discover and settle completely open spaces.
The better analogy is that of people exploring a new land. Different groups chart their own paths to get to what they think is the most fertile land, using their personal experience and tools at hand to guide them. The time spent wondering about another’s path will only distract you on the journey, or lead you to wander into territory that they claimed first.
We see this often in the digital startup space. Lots of companies are feeling their way toward a product-market fit, and we are all too busy plotting our own way to try and assess or match the competition. In new markets with private companies, no one really knows who is winning or losing anyway. Thanks to the hype cycle, everyone seems to be “killing it.”
Further, you might find that a company with a similar approach to yours is better off partnering with than fighting against. Like pioneers traveling through dangerous lands, partnering can actually help both companies survive and create a market worth fighting for later.
On the other hand, I find that in new markets you are actually competing over something much more challenging: Because no one has heard of your company or product before, you must compete for the attention and interest of your target customers.
This attention and interest is more taxed than ever before. Whether trying to get a lunch appointment or buying commercial TV time, your prospects have never had more people and companies fighting for mindspace. Yet there are merely 24 hours a day and only so much attention to go around. Competition is no longer limited to your market or category; we have to compete with everyone else who wants to get in front of a customer.
So we should all ease back on the non-disclosure agreements and competitive benchmarking. Keep testing and growing your own business, and spend much more time earning the attention of your customers. Innovation is a path where everyone can win.
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