Maintain Your Competitive Advantage by Focusing on Your Most Valuable Asset -- You For many products and services, it's not simply about developing a competitive advantage -- it's about keeping one.
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"What's your competitive advantage -- your secret sauce?"
This is a question you'd better know the answer to if you want any investor to take you seriously. Nevertheless, it's also one that caught me off guard at a recent NJ Founders and Funders event.
Why? The investor was asking me which patents or trade secrets I held that made me stand out from the crowd. But, while I do hold patents, I don't consider them to be my competitive advantage. I'd guess that a number of you probably feel the same way.
So, what did I tell the investor about my competitive advantage -- and what would I tell you?
Winning in business is like winning in chess.
For many products and services, and commoditized ones in particular, it's not simply about developing a competitive advantage -- it's about keeping one. In my case with SEO, for example, any change I make to a website is public information. This means that it's relatively easy for determined competitors to review and copy any work that I do.
The same is true for most software products and services. Just consider, for example, how tech giants have already commoditized artificial intelligence with their AI-as-a-service offerings. This goes to show that, as TeamFit co-founder Steven Forth said, "Once a service is well understood by its developers, buyers and consumers, and provides sufficient value, it will be commoditized."
As such, for industries where your strategies or products are easily replicable, maintaining a competitive advantage is a lot like maintaining a competitive advantage in chess: When everybody knows the same rules of the game -- and can study the same strategies to win -- a strong track record and relentless innovation are the only things that can keep you on top.
In this sense, you are often your own competitive advantage.
Developing a track record of success through innovation
Accordingly, maintaining your competitive edge in business requires you to improvise and innovate in every new scenario that you face, relying on the intuition and confidence you've earned from your battle scars over the years. This helps you develop and maintain your reputation as someone who wins for your customers.
So, here are some quick tips to help you do just that:
1. Invest in your expertise.
The first step to building a strong reputation for yourself and your business is to choose a specific expertise -- and focus on developing it. Rather than trying to be the best at everything, try to be the best at one thing (or two or three, max). This same idea is one that has been repeated by one successful entrepreneur after another after another. Just make sure whatever skills you decide to focus on are important for you customers, and different from those of your competitors.
2. Pick your battles.
While it's important to choose your areas of expertise, it's equally as important to choose whom you work with. As such, a second recommendation is to think ahead and pick your battles wisely. In other words, work with the clients who will give you the best chance at success. This is not to say that you should only pick the low-hanging fruit. Rather, the idea is to work not just with any client, but only the ones you know you are best qualified to help.
3. Compete against yourself.
Just like chess players might compete against themselves as practice, you should challenge yourself to improve each day. If you achieved great results for one client, try setting the goal of achieving even better results for the next one, and strategize ways you can build off your takeaways from each previous engagement. The key here is to learn from your successes and failures so you can double down on your success and maintain a sharp competitive edge.
4. Share your secrets and successes.
You might be surprised to find that sharing some of your valuable secrets can be a great strategy to force you to develop new ones. Additionally, instead of keeping all of the knowledge you've learned to yourself, sharing it can be a smart public relations strategy to position yourself as a leader. With this in mind, work with your most satisfied clients to publish your biggest wins as case studies or contributed articles (like this one) as a way to showcase your expertise.
5. Keep innovating.
Elon Musk recently defended the importance of relentless innovation, saying, "If your only defense against invading armies is a moat, you will not last long. What matters is the pace of innovation -- that is the fundamental determinant of competitiveness." Ultimately, you achieve this by putting in the time to practice and hone your craft. This gives you the confidence and the intuition to adjust each time you face a new challenge, because things never happen the same way twice -- you always need to be able to adapt knowledge to new situations.
So, if you are still looking for your competitive advantage, be sure to keep these tips in mind. Ultimately, it comes down to narrowing and refining your expertise, selecting the right clients and continuously adapting to new situations. As long as you keep this up, you'll keep a competitive edge that no one else can beat -- despite their attempts to try.