New venture outsourcing blog

We meet with entrepreneurs at all stages of venture creation, one of the first questions I often ask is about competition. In light of this I thought it would be useful to put up some thoughts on the dreaded “C” word:

Competition isn’t a bad thing.

Educating customers is a difficult prospect, especially for a product or service that is disruptive. If your competitors are going to help you do this you should thank them. In the face of competition we are forced to articulate the meaningful, differentiated value we are providing.

The amount of competition is likely to be inversely proportional to what we initially think.

Our gut reaction tends to be ‘feast’ or ‘famine’ – either “I have no competitors” or “Every venture on the planet is trying to do what I do”. Each of these scenarios merits more work into understanding your competitive landscape; what do people buy and why do they buy it? A corollary of this is the classic sell one each person in China business plan.

Competition isn’t just direct competitors.

It is goods or services that are alternatives to yours – including, but not only, those that are similar to yours. If you are an event planner your competition isn’t only other event planners but also the resources available for those planning their own events.

Competition isn’t static.

The most successful ventures will foster the growth of competitors – the secret is knowing that this will happen and planning for it.

Even the most revolutionary ventures have competitors.

That is to say the customer always has a next best alternative. Even a insulin for diabetic (a classic example of a necessary purchase at almost any price) has an alternative – no insulin at all.

We’ll add to the list as the not-so-dreaded ‘C’ words come up in conversations, business plans, and presentations.

Does competition have too negative a connotation? What do you think?

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