How to Cheer on Your Competitors While Aiming to Win

While you'll never bear hug your competition, don't lose perspective of the important role they play in building your business.

learn more about Arun Agarwal

By Arun Agarwal

Richard Mackson | USA TODAY Sports

Opinions expressed by Entrepreneur contributors are their own.

Many entrepreneurs assume that a startup's competition is its primary threat. In reality, having no competitors can be far more dangerous. Without opponents that offer options in your category, you take on the complete burden of market formation. Succeeding under those circumstance hinges on three key elements: prospective customers who recognize the problem you address, understand your solution and want to solve that problem with your offering.

In a competitive market, your rivals' marketing dollars work alongside your own to educate prospective buyers on each of these elements, helping you both succeed.

Still not convinced? Here are three reasons why you should be root for your rivals' success.

Related: The Greatest Competitive Advantage Is How Hard You Work Before the Game Begins

Customer apathy

The solution to advancing market formation is building awareness through customer education: using marketing and sales to hammer home the problem, the solution and its urgency. Unfortunately, these efforts can be wildly expensive, and they can't guarantee you a customer. Once you've established conviction in a customer's mind, his or her desire to compare alternatives is instinctual.

The gain you get by working with your competitors to drive down the cost of education far outstrips the difficulties of having to compete in actual (vs. hypothetical) deals.

Related: 4 Signs Your Team Has What It Takes to Compete

Customer risk tolerance

Most mainstream customers are risk-averse. Proposing a new concept to their peers risks their reputation, or, in some cases, their employer's energy and money.

Your competition helps you by making these risks feel manageable. Embracing a new concept is a much riskier undertaking than signing with a new vendor. When customers can see multiple players in a space that's been validated by third parties, they know they aren't getting into business with an inexperienced vendor that's trying to pioneer some wiz-bang widget. By participating in market formation, your competitors help ease customers into taking the risk of investing in your business.

Misunderstanding what the customer needs to hear or see

As a startup, every decision you make should take into account whether it will help your business reach and serve the right customers. Your competitors are one of your best resources for these conversations; they show you where you're weak and need to be stronger and inspire your team to stand out on all aspects of execution.

Another mistake competitors help your business avoid is over-differentiating your message. What if Google didn't want to be a "search engine" because there were already a bunch of those, and instead called its service "web organization?" How would customers explain it to each other and create a viral adoption effect?

Maintaining an echo of related but differentiated messaging defines your industry, allows third-party influencers, such as analysts, to coin terms and offer commentary and arms customers with a shorthand understanding of your value and how it will serve their own needs.

In the early days of market formation, it's unlikely that you or your competitors can reach all prospective customers -- the costs of sales and marketing are simply too high. While you'll never bear hug your competition and more days than not you'll curse them, don't lose perspective of the important role they play in building your business. By welcoming this value, you can focus your energy where it really matters: on your customers.

Many times, direct competitors won't even pose a long-term threat. Market forces naturally push you and your competitors to different corners of the industry. As you each develop solutions to meet customers' needs, you'll find less overlap among your prospective base. It's only when you and your competition both have massively large businesses that you start to cannibalize each other materially.

As a startup, you contribute to your own success as you cheer on your competition, and you address your real enemies: customer apathy, customer risk tolerance and team focus.

Related: Why I Stopped Saying, 'I'm Not a Competitive Person'

Arun Agarwal

CEO and Co-Founder of Infinio

Arun Agarwal is the CEO and co-founder of Infinio, a platform that allows companies to add storage performance to their virtualized data center.

Related Topics

Editor's Pick

Everyone Wants to Get Close to Their Favorite Artist. Here's the Technology Making It a Reality — But Better.
The Highest-Paid, Highest-Profile People in Every Field Know This Communication Strategy
After Early Rejection From Publishers, This Author Self-Published Her Book and Sold More Than 500,000 Copies. Here's How She Did It.
Having Trouble Speaking Up in Meetings? Try This Strategy.
He Names Brands for Amazon, Meta and Forever 21, and Says This Is the Big Blank Space in the Naming Game
Thought Leaders

The Collapse of Credit Suisse: A Cautionary Tale of Resistance to Hybrid Work

This cautionary tale serves as a reminder for business leaders to adapt to the changing world of work and prioritize their workforce's needs and preferences.


6 Myths About Leadership That May Be Holding You Back

By dispelling these leadership myths, we can create a more realistic and nuanced understanding of what it means to be an effective leader.


3 Ways for Women Tech Founders to Secure Funding

New research identifies strategies to help women access the startup capital they need to grow.


7 Ways Dating Apps Are Lying To You

When people are reduced to a profile picture and bio, it's easy to forget that they are real human beings with complex emotions and experiences.


I Advise the Real-Life 'Logan Roys' of the World. Here's Where the 'Succession' CEO Went Wrong.

Based on my experience working with and counseling the real-life Logan Roys of the world, here are five lessons the Roy family could benefit from learning.