13 Ways To Think About And Crush Your Competition

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13 Ways To Think About And Crush Your Competition

 

A few weeks ago, there was an article that came out called "Google Currents, Onswipe's Nightmare?". I'm also preparing for our first board meeting with newly elected independents and one of the points we are talking about happens to be competition. As you start to grow competition becomes a healthy thing to think about. Here's how I think about competition as a cofounder and CEO of a growing venture backed startup:

Don't Worry About Google

300 competition startupsAlmost every growing startup comes to a point where they have to worry about "what if Google does it." If it is a market worth getting into, then Google or someone else as large as them will almost certainly get into the market. What you aren't remembering is the fact that it is probably going to be a smaller effort with little or no budget inside of the larger company. The main focus of any large company is their main profit driver, which is almost certainly not your startup's experimental business model. Microsoft, Google, and every other large company lacks the main asset of a startup: speed. By the time that a larger company really puts momentum and force behind competing against you, then the game is most likely over for them. Google took over seven years to truly compete against Facebook, which had 800 million users at that point. Everyone heralded Facebook Places as the end of Foursquare forever and that they should pack up shop. A year later, Facebook Places has faded into obscurity while Foursquare's traffic has soared. When a large incumbent comes into your space, largely ignore them and use the press for validation.

Find A Giant As An Ally

The enemy of my enemy is thy friend. If a giant such as Google comes into your market to compete against you, odds are one of the other giants are taking notice as well such as Amazon, Yahoo, Microsoft, Facebook, etc. . They might be planning to come into the market as well or already exist in the market with a flawed product. You should see this as the opportunity to partner with one of the other larger companies out there. You get massive distribution and they get the benefits of being in the space without a loss of speed or manpower. This route can also be one that leads to an acquisition at the end of the road.

Copycats don't have the roadmap

Before someone like Google comes along to compete with you, a slew of copycats will spring up. We recently had this happen with Onswipe as an unoriginal 100% ripoff popped up using our name to gain press with a shoddy product. Along the way, a copycat will constantly try to play fast follower by copying your latest and greatest feature. The problem is the fact that, copycats are always one step behind and often stay that way. They never started out creating the company as a problem they wanted to solve, but as a way to capitalize on the great opportunity that you shed light upon. The copycats will create confusion in the marketplace, which should be your greatest worry. Potential customers may ask how you are different than them. The way to combat this is to sell more than just the current snapshot in time, but the longer term vision. Since the copycat does not have your startup's longer term vision, you can out sell them.

Mis-education creates false competitors

If you are similar on the surface to another company, the press and potential partners may be fast to label you competitors. Many people think of Flipboard as a direct competitor to Onswipe. This happens because we both provide beautiful interface on the iPad, but our businesses are entirely different. The same false competition between Facebook and Twitter happened many years ago as both were thought of as Social Networks. Over time it has become very clear that Facebook and Twitter are two very different companies. To combat mis-education in the market, you should have a simple and clear 2-3 sentence reasoning of why you are different. Over time as both companies in a space mature towards their individual visions, it will become apparent to anyone the difference between the two companies. Up until that point, it will likely take a mix of explaining the difference to the market while having many one on one conversations.

Don't try to win on features

Competitors will try to constantly battle you by adding an incremental amount of features. It's tempting to want to constantly play a game of one-upping a competitor with features, but that usually results in a product that no one wants. It's the path that many tablet makers have taken when competing against the iPad. There is a constant game of one-upping on features like processor speed or 3D screens, yet nobody has even come close to overtaking the iPad in the tablet market. Why is this? Everyone is trying to BE Apple, not BEAT Apple. When it comes to features, march to the drum of your own roadmap and vision.

Price wars are a race to the bottom

Many entrepreneurs think that a competitor will come in and beat them on price. You may lose some customers, but in the long haul, a competitor can't be you by just being cheaper. If a competitor does come into your market and competes solely on price, do not be tempted to constantly lower your price to beat them. Instead you should fight on product quality and the true return on investment for the user. When it comes to a competitor that comes into your market and offers a product for free that you have charged for, then you may have a problem depending on what type of business you are building. If you are building a company built upon fast growth, then your business model may be flawed in the first place. If it's not, then you should dig in deeper as to why the competitor is offering the product for free. They will eventually have to turn a profit, whether it is by charging YOU or someone ELSE.

Speed wins

Larger companies are often slow, though large in size. They may ENTER your market, but they will often not have the speed to STAY in the market. Speed comes in a few different varieties when competing against a large company like Google or Microsoft. The first variety of speed is iteration. How fast can you iterate on a product after market feedback? A large company is going to have to stick to a much larger roadmap and won't be able to turn a ship on a dime. The second variety of speed is feature addition. Large competitors won't be able to add features as fast as you and will most likely be trying to play catch up to what you already have.

Focus on the normals

Pinterest has become a huge success and has < a href="http://allthingsd.com/20111222/pinterests-growth-hockey-stick-would-make-a-great-craft-project/">grown tremendously over the past year. The largest part of Pinterest's success story has not been its adoption by the inner circle of Silicon Valley or sex crazed college students, but those of women from Middle America. Most competitors will come into the market and try to create buzz amongst the early adopters of the tech community. Instead of falling into this trap, try to attract the normal users of the world ie- women in the midwest or a teenager that wants to find new music. It's hard to reach this audience and once you have a grasp on it, it will be hard for a competitor to come in and compete against you.

Cash matters when scaling

If you have started to grow and a new competitor comes into the market, it's wise to have enough cash on hand to really ignite your growth. Everyone thinks that products take off and that it's all taken care of. There are always financial barriers in place when rocket fueled growth kicks in. If you are lucky enough to hit that point, you want to make sure that you have the cash to leave your competitors in the dust.

You are your biggest competitor

You are often your biggest competitor. You should not completely ignore your competition, but the biggest battle happens inside of the four walls of your startup's office. Startups come down to pure execution of a strategy on a daily basis and maintaining the faith for the long haul. Most startups don't lose to competition, but because they lose the will to fight.

Avoiding the build versus buy problem

Many startups will not be competing with other startups, but with the internal development teams of their larger customers. Moveable Type lost the blogging wars to Wordpress by not moving themselves towards being a fully flexible platform. Instead of having conversations that are a build versus buy scenario where it's either your startup or your customer's internal development team, you should be positioning yourself into a build OR buy scenario. In order to do this, your product needs to become a platform that others can build upon to meet their needs. This will let you grow overtime to meet the needs of any customer without sacrificing your own roadmap. This will often require you to sacrifice some short term gains for long term sustainability. Any and all changes you make to your software have to be applicable to the greater good of the platform. That means no custom development and no bending to the wills of customers crazy demands.

Bring traffic to the table

The largest successes of the past few years have been audience driver. Twitter and Facebook have been killing search as a referral source, while YouTube has opened brought forth a new audience for professional and amateur creators alike. Tumblr has seen widespread adoption by major publishers due to the viral nature of the platform. Pinterest is getting adoption by mainstream fashion brands due to its ability to drive more traffic than Facebook. If you can bring traffic to your users, then they are going to be addicted to your service like crack cocaine. Once network effects kick in, a publisher is very unlikely to leave your service.

Bring money to the table

Most partners want two things. The first thing I touched on before, which is traffic. The second and most important is M O N E Y. If you can make partners money, then they are likely to side with you and stay when a competitor comes along. Cash is a powerful force and if your company can be a direct or indirect way for people to make money, then you are going to be hard to unseat. Everyone thinks that Google won the search wars by having JUST the world's best algorithm. They had a great product, but they gained distribution by powering search for publishers. With this, they were smart enough to make money for publishers and win the search wars. How have you dealt with competition in your space? Another interesting angle that I wish I could analyze is, what it is like to enter the market as a competitor to an existing incumbent. Whatever the scenario may be, the most important of the 13 lessons above is to remember that you are your own competitor. Keep fighting the fight and be prepared for the war, not just the battle.

You Should Follow me on Twitter: http://www.twitter.com/jasonlbaptiste, Friend me on Facebook: http://www.facebook.com/jasonlbaptiste, Email Me: jbaptiste@onstartups.com

Posted by Jason L. Baptiste on Tue, Dec 27, 2011

COMMENTS

I like the shoot first ask questions later attitude in this article. Every point is bang on the money and is valuable if people actually think about the potential beneficial impact of what they are reading. If people want to "be" the target company, why not just forget about business for self and get a job there. Remember, when companies get the size of Google etc., it doesn't mean they are invincible, just bigger targets.

posted on Tuesday, December 27, 2011 at 11:15 AM by Alan Hunter


Great post. I love the "Focus on the normals" approach.  
 
As a follow-up to that I'd also recommend winning with better customer support. It's easy to focus on growth and lose site of the complete customer experience. That's one of our big goals at http://www.kickofflabs.com 
 
If your growing smart you are also making customers feel like your a partner... not some cold store manager behind a stark counter.

posted on Tuesday, December 27, 2011 at 11:47 AM by Josh Ledgard


This is one of the best summaries of dot com business competition strategy I have ever read. Bravo to the author. I would also add to make sure and watch what buzz your top 3 or 5 competitors are getting out in the market and make sure your company understands how best to position based on their messaging. In today's crazed Internet world, I am a big believer, if you aren't different and shouting what you do differently, then you shouldn't be in the game. We need consumer value, positive human value, to rethink traditional online methods - thanks SJ! 
 
Power to the Veterans - http://www.veterancentral.com 
 
Jonathon Lunardi 
Site Director 
Veteran Central

posted on Tuesday, December 27, 2011 at 2:11 PM by Jonathon Lunardi


I'd also like to add in there 'transparency'. Alot of big companies hide behind the curtains, while smaller companies that are transparent about things are have more culture often win hearts and users for life.

posted on Tuesday, December 27, 2011 at 2:45 PM by James F.


Hello Jason, 
 
Enjoyed the article. I'd like to feature you as an Anthead Blogger in January 2012 and talk a bit about your book. 
 
 
 
Please go here to see the setup and let me know of your interest. 
 
 
 
http://antheadsystem.com/?page_id=361 
 
 
 
Thanks!

posted on Tuesday, December 27, 2011 at 2:46 PM by Leander Jackie Grogan


This is a wow article. Bullet point bible for 2012 strategy. Many thanks. I'll be following via Flipbook.

posted on Tuesday, December 27, 2011 at 3:04 PM by A.M.


Hey Jason,  
 
Great article! One of the best I read. 
 
As to entering the market as a competitor to an existing incumbent - behave as a leader!  
 
If you are not a copy-cat, there are likely good reasons you decided to enter the market in the first place. And that's probably because you believe your solution is by far a better one. So put the money where your mouth is. 
 
If your solution is much better indeed the incumbent will look pale and clients will start switching.. 
 
Victor

posted on Tuesday, December 27, 2011 at 3:08 PM by Victor


Jason, 
 
This is a really fine article! I like the "You are Your Biggest Competitor" section. You can't ignore your competition nor should you let them dissuade you from pushing forward. A ships captain doesnt give up the journey because the winds change. He/she just sets their sail a little differently and keeps moving. 
 
Rich Greene 

posted on Tuesday, December 27, 2011 at 3:09 PM by Rich Greene


Nice Article Jason. Do you think focus (even more aggressively) on maximizing value to customer and thereby generating loyalty is a viable tactic when faced with competition? Does it deserve a sub-section in your article above?

posted on Tuesday, December 27, 2011 at 5:17 PM by Pranav Garg


Innovation and spead of implementation will rule in 2012: Business Fundamentals for 2012: http://d2356j9t3w78l.cloudfront.net/LittleGiantBookofBusiness2011.pdf

posted on Tuesday, December 27, 2011 at 5:28 PM by Dan Auito


When you align your business propositions with motives(financial, emotional,entertaining incentives) of large number of people (your customers, publishers, suppliers), they will protect you from competition

posted on Tuesday, December 27, 2011 at 9:05 PM by Manikandan


"Don't try to win on Features". It is true. We learnt from our experience. Good to remember this again.

posted on Tuesday, December 27, 2011 at 10:46 PM by Dongan


well said. know your strengths & weakness along with your competitors

posted on Tuesday, December 27, 2011 at 11:01 PM by Roshan


Hi Jason, 
How true....I am facing the same issues currently. Your point by point style is very lucid and brings out clarity of thought to start ups like me.

posted on Tuesday, December 27, 2011 at 11:12 PM by Krishan Jagtiani


Good Article but bit confused about Google point "Dont worry about google". Actually today google is everything. Without google no business.

posted on Wednesday, December 28, 2011 at 11:08 AM by Mobile-Money


Awesome Jason and thanks for sharing - this is an excellent and concise summary. 
 
Best Wishes

posted on Wednesday, December 28, 2011 at 11:09 AM by Mat


"Dont try to win features" is good point though.

posted on Wednesday, December 28, 2011 at 11:11 AM by Mobile-Money


A couple of items jumped out at me as being "right on the money". First, focusing on the normals. Our company sells very basic services that pretty much every business needs. Our bread and butter clients are real business people who need real services and results. These "normals" are the backbone of America. Second, find a giant ally. We have been surprised by several "giants" that have partnered with us. At first we couldn't believe our luck, but now realize that these partnerships produce a win-win. We get access to huge databases and they get rapid deployment of needed services to their clients.  
 
 
 
As entrepreneurs we often create our own worst nightmares. The truth is that the poor economic climate is providing great opportunities to companies bold enough to go after them. Great article

posted on Wednesday, December 28, 2011 at 1:54 PM by Aaron Young


I loved this line, "Most startups don't lose to competition, but because they lose the will to fight." 
 
So true. So much comes down to desire and unwillingness to quit... A good strategy with a stubborn will is a hard combination to beat. 
 
Mitch Gordon

posted on Thursday, December 29, 2011 at 8:52 AM by Mitch Gordon


A very interesting useful article I have taken the liberty of copying and pasting a chunk out of the article then posting it on the Landscape Juice Network together with a link back to this site. 
 
 
 
<a>http://www.landscapejuicenetwork.com/forum/topics/business-101<a> 
 
 
 
<a>http://www.seriousgardener.co.uk<a>

posted on Friday, December 30, 2011 at 1:35 AM by Philip Cumberland


"Copycats don't have a roadmap" Its really a true one.

posted on Friday, December 30, 2011 at 9:37 AM by chronic


This is a good article on some key thoughts for start-ups. It's key for tech start-ups, but many of the parts could apply to other businesses. 
Thanks for sharing, 
AJ

posted on Saturday, December 31, 2011 at 2:31 PM by AJ


If people want to "be" the target company, why not just forget about business for self and get a job there.  
 
WTF

posted on Sunday, January 01, 2012 at 8:21 AM by matt


I would add to the list that one of the key points being a startup is to be known as one. Try NOT to showcase yourself as big when you are not and instead boast in being small. 
 

posted on Sunday, January 01, 2012 at 11:36 PM by Jinesh Parekh


Love the article. Don't be "different" for the sake of being different. but set your self apart by truly listening to what the customer needs and provide that need with your own solution that can clearly be communicated to your customer! 
 
Great article Jason, thank you for sharing!

posted on Monday, January 02, 2012 at 10:59 AM by Jeff O'Harra


awesome stuff Jason. Will definitely apply some of this to my 2012 ventures. 
thanks alot 
 
Shaun

posted on Saturday, January 07, 2012 at 3:53 PM by wedding videographer auckland


We beat the competitors with customer service and pricing that's in-line or less.  
 
We're in the national ISP business in the USA, competing against Verizon & Comcast for internet connections. 
 
We can sit here at our desks and determine any DSL problem in 3 minutes while the customer is on the phone. Since the beginning, our connections are more secure than Verizon's or Comcasts... thus the only time we get a Tech Support Call is when a line is down in the customer's neighborhood. 
 
 
 
Same thing goes for Email addresses. While you can get a 'free' email address anywhere, people should be prepared to throw them away. In contrast, because we have written mail server software that allows the customers to keep the junk out, we have customers using the same email address since 1996. 
 
 
 
So here's a question for your net Blog, Jason Baptiste: Why do people switch from a 'free' email account on AOL -- to a 'free' email account on Hotmail -- to a 'free' email account on Yahoo -- to a 'free' email account on Gmail -- instead of paying for a quality Email service where you won't get faked emails from IRS about fake refunds, or from fake banks. 
 
 
 
BarryZ 
 
Reading PA

posted on Tuesday, January 10, 2012 at 1:05 AM by BarryZ


Loved reading the article,was a great one by Mr.Jason:) very helpful

posted on Tuesday, January 10, 2012 at 4:18 AM by Utkarsh Lokesh


Great post - a very enjoyable read!

posted on Wednesday, January 11, 2012 at 5:47 AM by John Dineen


I love the part about "Keep fighting the fight and be prepared for the war, not just the battle." Sometimes loosing some battles discourages me so much that i loose sight of the war. Focussing on winning the war keeps me going longer

posted on Thursday, January 12, 2012 at 6:39 AM by Hemant


"Price wars are a race to the bottom". Man... I've said that soooo many times. I appreciate all the other great points in your stellar article.

posted on Friday, January 13, 2012 at 7:51 PM by Ken Lonyai


The section "focus on the normals" took my breathe away as it captures the essence of a project on which I'm working.  
 
Perhaps, if you're surrounded by the "unnormals" all of the time, it may be hard to think about the "normals." But, it seems to me that KISS and KIF (keep if fun) for a currently unattended "normal" audience is a good approach.  
 
We will see.

posted on Sunday, January 15, 2012 at 1:07 PM by Andrew Ellis


guarantee your start-ups success--deal directly with the building owner--pay below market rents--save $ 100k in commissions--princeton new jersey area location

posted on Thursday, January 19, 2012 at 9:59 AM by JAMES VOGELSONG


Jason 
Punchy and succinct. This is very good stuff and I agree entirely with your approach. I am a fan of the Lean Start Up by Eric Ries and most of what you say is in line with his approach. 
Would love to get you on to my site for a guest post if you would be interested and very happy to reciprocate. Please contact me if you would like to discuss further 
Best regards 
John

posted on Wednesday, February 01, 2012 at 3:59 AM by John Colley


A great article, simply put. One of the important lessons is to keep yourself grounded and focused. Remember why you wanted to start your own business in the first place.

posted on Friday, February 03, 2012 at 2:23 AM by Jane Tchan


Really enjoyed the article and love that there are such great resources like this that a small business can utilize! On another note, if you are really interested in analyzing what it's like to enter the market as a competitor to an existing incumbent, I'm your gal and would be happy to share our experiences, trials, tribulations and what we've learned. It's been a whirlwind!

posted on Friday, February 03, 2012 at 1:52 PM by Stacey Feeley


Superb article. "Bring traffic to the table" allowed me to think of a completely new angle for my non-core project. Thanks, it was a truly inspirational read!

posted on Tuesday, February 07, 2012 at 4:32 AM by Ray Wilkins


Hello, 
Loved your article! I agree with the comment to "stay grounded and focused on why you started your business". This is so true and important.

posted on Sunday, February 12, 2012 at 6:29 PM by Doreen Munoz


Great post..enjoyed reading..

posted on Thursday, February 16, 2012 at 6:40 AM by Ankan


Hi, 
Good food for thought. 
In one of your paragraph, you mentioned about copycats. What do you say about Canon who pipped Xerox by doing exactly what the latter did and became market leader within short span of time? or even samsung who overtook Sony in consumer durable space by doing almost similar. I think, being copycat also helps in achieving one's organizational goals.

posted on Wednesday, February 22, 2012 at 5:13 AM by Manjunath Udyavar


Comments have been closed for this article.