Since I founded RightHello, I have spent a lot of time worrying about how to deal with competition in business. My team, co-founders and VCs often asked about our competitors. Which sometimes made me worried that our business rivals were at least 10x better.
When your business competitors organize epic PR stunts or ad campaigns, social media algos probably haunt you with them on a daily basis.
However, not too long ago, I realized something. “This is not OK!” – screamed my inner voice, because it was disappointed with me taking business competition too personally.
So I spent some of my off time contemplating a logical, data-based answer to the burning question – should I be worrying more about competition?
Grass On The Other Side Of The River Is Always Greener
Definitely relevant majestic photo of a dog staring at a river / Source: pexels.com
We tend to be disappointed with our own situation. We forget that other people also have to overcome significant hardship to achieve the things that we get jealous of. But then again, we rarely talk about our failures.
Marketing and PR feed on positivity. Sharing good news is natural, so that’s most of what we see on social media, in ads and in PR campaigns.
But some of what we see is:
- The best perspective on things (“100 new customers just this month” – but they’re all on a free plan)
- Overblown (“We implemented 10 new features” – but nobody’s using them yet)
- Incomplete news (“We’re getting a new round of funding” – is it because you have no cash left, or because you need a growth boost?)
Seeing an overly positive PR campaign from a rivaling company can be kind of depressing, but if the grass looks too green on the other side of the river – you’re probably just imagining things.
Managing a company focused on fast growth is an extreme sport. You’re fixing things around the clock, managing storms, going through asap meetings to calls.
But if I have doubts whether we’re doing the right things, I just think – how can I be sure that our business competitors really have a better plan? You can never know a 100%, so all you can do is bite the bullet and keep focusing on your own goals.
How do you know whether your should be scared of your business competitors?
Your company definitely needs a good team and a large group of customers to prosper.
Things migh￼￼￼t get tough really fast if you don’t have access to both good team members and enough customers to feed your team and make a profit.
Are you fighting in an overcrowded market?
Competition isn’t a bad thing – if you’ve got successful competitors, it means that there’s a larger market for your business than you thought.
Have you heard of the blue ocean / red ocean comparison for markets? You don’t want to be in a red ocean, but most of us are. A red ocean market is very competitive, with plenty of companies fighting for the same slice of pie.
Everyone wants to be in a blue ocean market – where your company is the only, or one of very few players.
To name an example, I’d say that you should be worried if you’re running an interactive agency that works locally with big customer brands. It’s a very tough, customer-focused market where it’s impossible to grow without a really solid plan and execution, along with a lot of luck.
But if you’re running the first interactive agency in an emerging market, and you can offer the highest quality (or other unique value) – then you have a good runway for growth, and you should focus on that.
Are you competing over the same employees?
Say that you run a software development company and you don’t allow remote work. If you need Ruby-On-Rails developers, then you’re going to have a hard time hiring them locally.
That’s because ROR developers are still in high demand and there aren’t enough good developers around the world to satisfy market needs yet. If your competition accepts remote work, then you should be worried.
But assume that you work out a good way to control remote work. Your market for hiring new developers becomes much more open.
The software development market is a very relevant case, because it’s an employee market. Without expertise and knowledge of skilled developers it’s hard to get ahead, that’s why software development companies are outdoing each other in treating their employees well.
If there aren’t many great employees that fit your required profile, you should be doing all you can to reach them – if it’s not possible locally, then go beyond that. You should be worried if your company requires expertise that can’t be found locally, especially if the right people are already working for your competitors.
Don’t take it too personally
Competition makes all of us uneasy, whether we like to admit it or not. It’s normal to worry that others are doing a better job than you.
However, most of the times that you’re afraid, the voices in your head aren’t doing your own company any justice. Because there’s probably no reason to worry about your competition too much – but doing so can cripple your execution. It’s a self-fulfilling prophecy of startup failure.
So cheer up and focus on executing your own plan and achieving the goals you’d previously set for your company and yourself.
See also my other post about: How founders can kickstart startup sales