“A new company just launched and they’re encroaching in on our space.”
That’s the weary pang of insecurity and self-doubt. As an entrepreneur, oftentimes, the biggest obstacle in your life is you, not your competitors. To fret about every new company encroaching in on your space is entirely self-defeating.
In fact, many times, having competitors is a good thing. Here are three reasons why:
Competition keeps you on your toes
Honestly, there’s nothing worse in business than being complacent.
Every business needs at least some threat of competition because knowing someone can steal market share at any time motivates you to maintain high quality product and service, keeping customers happy.
Don’t think of competitors as predators that threaten your business’ very existence though; the situation is hardly ever so dire. Instead, imagine they are concerned parties that help keep you accountable. Effectively, if you do not build offerings that satisfy your customers best, the competition will.
Sadly, unchallenged market leaders are slow moving giants that feel no sense of urgency to build better, faster or smarter. In markets that are new or untapped, sole players often, without realizing, abuse their customers who have no alternatives. Monopolies create an unnatural order and are bad for industries, and are especially bad for consumers.
But why would you want that anyways? Being the sole player in an industry isn’t sexy. Rather, being #1 out of 300 is.
Competition encourages innovation
When competition comes ‘round, do not sulk.
Naturally, this is easier to do if they haven’t made a dent in your overall sales. If they’ve made a substantial move on your territory, do not hit the panic button just yet. A more productive approach to dealing with competitors is to understand why and how their products/services are adopted and used.
Thorough comprehension of their business’ advantages helps you recognize your own shortcomings. This newfound sense of self-awareness makes it easy to identify areas for improvement and come up with an actionable plan to innovate to win back and win more customers.
Ideally, operating with the constant threat of competitors should enable you more than it should hinder your business. Of course, we’re all human and we’re all vulnerable creatures. As hard as it may be to stomach the fact that there are competitors, you are better off worrying less about them and using that energy towards more productive things. Work to steal market share by building a better business and product.
Competition increases demand
One thing that competition does tend to do is it validates your business. What it also does, which often causes anxiety in entrepreneurs, is create a lot of noise.
But do not let all the clamoring perturb you; use it to your advantage.
As each of your competitors hounds the media to tell “their” story, strategically pitch a story about the new emerging trend within your industry and mention how you’re one of many at the forefront of said trend. Don’t be afraid to name the competition. As much as many business owners hate to acknowledge competitors, you’ll be seen as the more selfless source for journalists who want to talk about your industry.
The resulting media coverage tends to increase consumer awareness and, often, demand. Remember how flash sales became so popular (and how many of us purchased from multiple sites at the same time)? Another interesting example of this is the growth in user adoption and media coverage of virtual currencies.
Generally, consumers are wary if there is only one business offering a completely new product or service. Although the early innovators among us may jump at the opportunity to try an unproven one-of-a-kind gadget, that gadget won’t reach mass adoption unless similar devices are made and other businesses help educate consumers about the benefits of the product. Once competition helps to create more demand, you’ll want to build the best product that’ll make it easy for you to capture that new demand or to steal more discerning customers away from the competition.
The Main Takeaway
Don’t let competitors phase you. There are plenty of ways to take advantage of their presence. You’ll be surprised how much better your business can be when you rid yourself of a self-defeating attitude and adopt a healthier and more productive perspective on business competition.