Everywhere you see, competition abounds. It’s in your face more than ever because every company has a web site, a Facebook page, a twitter feed touting what they do.
What’s an entrepreneur to do? Can he/she compete against a Goliath? Can he/she convince customers that theirs is a better solution? Can she attract funding from investors who get concerned if they see more than a few competitors in her pitch deck? Some thoughts follow.
Embrace the fact that competition exists. If you are like an ostrich with your head buried in sand in times of trouble, you may feel secure, but when you come out, things won’t look so good.
Lot of folks say that competition is a good thing and that it validates the market. It sure does, but the leader has millions of dollars in marketing and sales budget and you are just getting started with your sales team. A common question that investors also ask is “How hard is for Goliath X to enter the market and crush you?” You could cite Clayton Christensen’s Innovation dilemma, but you got to do better than that. You need some intel from reliable sources to prove that the Goliaths are focused on completely different challenges or different market segments and that you could innovate your way to leadership in your focus area.
How about the multitude of other start ups that are potentially attacking the same problem? You absolutely need to do your research here. A good indicator is how much money your competition has raised. Crunchbase is a good source for such information. Also, look at their customer list / case studies on their web site. If there is huge overlap in target customers and customer geographies, you have your work cut out. But, there is no reason to give up hope. A majority of businesses take their business to a competitor once they end a relationship. You could be that competitor. So, when you win a business, make the switch over cost quite high (by legal means of course), so you can be sticky.
Don’t believe everything that your competitors web site says. The marketing web site could be all glossy, full of features and capabilities, but the reality could be much different on the ground. Your competitor could be days away from being pushed out, because their claims belie actual performance.
In a crowded field, you got to know your differentiation pat. It has got to be 3 or 4 things and they better be something deeply meaningful and not something that your competition can easily implement. Differentiation is not limited to product features. It can be validated IP or someone with deep domain expertise in your team.
Finally, it is execution excellence. A competitor may seem to have a great lead, but nothing is infallible. People make mistakes. Execution excellence is in your control. You can beat the competition with stellar customer service, paying attention to retention and never giving up because your competition is already doing business with a customer.