3 Competitors Every Entrepreneur Needs to Beat
Too many entrepreneurs view their competition with a Coke versus Pepsi mindset. Competition is rarely as simple as slightly differentiated products. Beating the other guy isn’t what makes a great company or what makes it profitable. Instagram, Swiffer and Nest had to compete with consumer habits and perceptions. Breakout products face competition from the formidable inertia powering the status quo. Success therefore comes from taking on the three real competitors every innovator must beat: the way it was done, the way it should be done, and the best way to get it done.
As great as you believe your new product or company is, the world got along just fine without you. The greatest competition every startup faces is convincing consumers that there is a better solution to the problems that vex them. Inefficiency and habit are your first real competitors. Microsoft’s Steve Ballmer laughed at the iPhone because he couldn’t envision people using a mobile device differently. People shared large files before Dropbox. Dropbox just made it so much easier that new users were not only willing to change their habits; they encouraged others to share files the same way. To beat the way it was done, your solution needs to be an improvement over the past.
Every product you have ever loved was a compromise from the ideal vision of its creators to the realities of shipping on time, on budget, and on price point. Anyone who has ever manufactured a physical product that had to be on the shelves for Christmas shopping knows how painful these choices can be. Every entrepreneur builds their business with limited resources, but competes with unlimited passion. Sometimes innovators just need to build something that solves one universal problem perfectly. Snapchat didn’t have millions in the bank when it started. Snapchat solved the problem of teens finding unwanted photos publically posted on social media. Now the company has the usage patterns and data of 700 million photos and videos per day and I am sure the founder is still working to add more features and functionality from his white board.The hardest competitor to take head on is the way it should be done. Many startups run out of cash striving to create the perfect product. You and your team spend months covering your white board with every conceivable feature and functionality your product should possess. Your vision of perfection will send your companies crashing on shores long before you have a large enough user base to keep the enterprise afloat. When it comes to coding: don’t get it right, get it written. The good is no longer the enemy of the great when we live in an ever changing world were new products and technologies are released daily. Get your product into users’ hands as quickly as possible and incorporate the crowd’s feedback to iterate. Your customers will provide the data you need to chart the best course for your company and bury any competitor that goes it alone.
Don’t focus on the other businesses in your market. At the end of the day, your toughest competitor will always be the face you see in the mirror every day.
This post was originally published in the Wall Street Journal May 15th, 2014