What does not kill you….

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What does not kill you….

 

(Source: www.pxleyes.com

“What if they come up with something similar? They are going to take our space in the market. What will we do then?” Someone presented these queries to a mentor in one of the startup programmes I attended, and I keep hearing these sorts of questions quite often in our startup ecosystem. They’re not asked with a positive sense of curiosity or with an intent to get suggestions on which to make strategic decisions. Instead, they’re more like premonitory twinges of insecurity, and the tone betrays the fear the people asking the questions have of impending competition.

Such apprehension is misplaced. The entrepreneurs asking these questions think competitors can enter the industry and kill their business. But Paul Graham, co-founder of Y Combinator, says, “It’s exceptionally rare for startups to be killed by competitors—so rare that you can almost discount the possibility.”

Paul Graham, co-founder of Y Combinator, says, “It’s exceptionally rare for startups to be killed by competitors—so rare that you can almost discount the possibility.”

The biggest hurdle, then, is not the competition; it is your lack of belief in your own venture. And to complain about how new players are entering ‘your’ market actually should be embarrassing.

So if competition does not actually kill you, then what does it do?

 

Makes you less complacent

(Source: assets.entrepreneur.com

In the absence of competition, you can end up being complacent, and there isn’t a worse crime than complacency in entrepreneurship. “It’s the silent business killer that strikes without warning and can bring even the biggest and the brightest companies to their knees,” says Matthew Swyers, founder of Trademark Company. When you’re a startup and think you don’t have competition yet, you might ease off once you have built a customer base. You might think you won’t have to take further actions because your venture will keep growing since there isn’t anyone else doing what you are doing. That thinking can lead you into the zone of dangerous complacency—you’ll be building your own tomb. “Don’t fear competition, fear complacency,” says Jermaine Edwards, an entrepreneur and blogger. Competition keeps you on your toes each and every moment of your entrepreneurial journey. Knowing that someone is going to take the share of the market you are in will only mean you have to up your own game. You have to improve on every aspect of your startup to accelerate your growth. That will eventually spur improvements in your own efficiency. Rather than a threat, competition is a watchdog that makes you accountable for steps you didn’t take. If you are incapable of satisfying your customers better, your competitors will.

“It’s the silent business killer that strikes without warning and can bring even the biggest and the brightest companies to their knees,” says Matthew Swyers, founder of Trademark Company.

 

Makes you think of product validation

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In the startup world, if nobody else wants to enter the market you’re in, what you do may not be worth doing. There are probably good reasons why others are not doing it. Think about it. The initial investments in startups are not that huge that they can keep others away. Neither are the switching costs for startups. The barriers are usually very low.

When competitors start doing what you do, they are validating your idea. Their entering the niche you are working in is a sign that your idea is workable. They will only step into the market if they think it is profitable. Otherwise, you would have been wondering why you are all alone, with no sustainable customer niche to support your business.

 

Makes you capitalise on more demand

(Source: cdn2.business2community.com

Competitors create a lot of noise when they enter the market, and that’s actually good for you. They hound the media to tell the story of rising trends in your industry, and also provide evidence of the problems and the gaps existing in the market. This awareness among consumers will increase the demand for the solution you provide, which means it increases the demand of your product, along with your competitors’. That is why there is a saying, “More competitors, more opportunities.”

 

Makes you think outside the box

(Source: www.lovemytool.com

There is no incentive to innovate when you have an easy life, without competitors. With competition, you can’t afford to sit back without working on any actionable programmes. Whether it is about reaching your customers, marketing your product, or building it, you need to find new ways to do things. While your startup is an innovation in itself, you must develop better service and product offerings, and that you can only do by thinking outside the box.

 

Makes you learn from their mistakes

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Lessons from competitors are priceless. There is a popular line from the book The Art of War by Sun Tzu: “Keep your friends close and your enemies even closer.” Your competitors, like you, are susceptible to mistakes. You can strategise to avoid repeating their slip-ups. When you have an open window on what they are doing, you will know what works and what doesn’t. “It saves you the time of trial and error, and the money devoted to running an ineffective campaign,” writes Quin Woodward-Pu, author of Type A+.

There’s this received wisdom that a business can thrive when there isn’t any competition, and that startups can thrive even more in such a scenario. Recent studies, however, show otherwise. One such study by Rousseau Associates, a business consultancy, analysed nearly 234,000 companies in the UK, and they found that the survival rates of companies that faced tough competition in their first two years were better than for those who faced less competition.

You will only realise the true potential and efficiency of your business when there are others pushing you, and when you accept the challenge with an open attitude.

It is time to change the perception of competition. Competition may have downsides, but what really matters is how you deal with it. You will only realise the true potential and efficiency of your business when there are others pushing you, and when you accept the challenge with an open attitude.

 

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Guest Tuesday, 12 December 2017