I recently participated in a panel discussion on entrepreneurism and was asked by someone in the audience how to handle competition when you're building a startup. My short answer? Embrace it.
Using real or perceived competition to help drive your business can be incredibly empowering. It is a potent fuel in your fight for customers, mindshare and industry leadership. It's the fight that keeps ideas fresh and business interesting.
It also tends to make you focus on your own endeavor. Learning of a new market entrant, or even more difficult, hearing about a big player that is testing the waters in your space, instantly forces you to act. Differentiation and execution become focus areas.
If you're going to keep others from nipping at your heels or are truly planning to run against the big dogs, you need to be able to clearly articulate and deliver your differentiation. Why are you unique and better than the others and why should your audience care? If you can't convince yourself and your employees of your real differentiation, you're going to lose.
Once you know what sets you apart, take action. If you're competing against the big dogs being able to execute quickly will be to your advantage. While they're getting approvals from all levels and composing PowerPoint presentations for all their internal stakeholders, you need to be leaving them in your dust. Odds are, as a startup, you are in much better contact with your customers and learning a lot more about what they need than the larger companies -- use that to your advantage.
While competition can help focus on setting your company apart from the pack, it can also provide other benefits.
Brings validity to the space. When another player enters the market, it's a clear indication that the pain point you are solving is big enough that others care as well. Having one or two other players in the space is actually a good thing because people start to take notice.
Allows you to learn from their mistakes. Making bets on which features to focus on with limited resources is difficult. Learning from where your competition has failed saves you time and effort.
Makes you a more nimble entrepreneur. No event is fun to watch if only one team is competing. Competition keeps you sharp, determined and driven. Being an entrepreneur is no easy job, but it's the battle that keeps you coming back day after day.