Get All Access for $5/mo

'Competition Is the Greatest Thing That Can Happen in Business' The president of consumer-product invention company Quirky says startups should embrace competition, not ignore it.

By Catherine Clifford

Opinions expressed by Entrepreneur contributors are their own.

Feeling your competition close in on you is stressful, but it also gets your adrenaline pumping. It makes you focus more intently, and ultimately, pushes you to create a better product.

"Competition is the greatest thing that can happen in business. It's the best thing," said Doreen Lorenzo, the president of consumer-product invention company Quirky, at a panel discussion on the sharing economy in New York City last night. "Otherwise you get stale, you get fat, you get slow."

Related: Get and Stay Ahead of the Competition With These 3 Tools

The panel featured leading executives from sharing-economy front runners, including the transportation company Uber, accommodation rental service Airbnb, and crowdsourced recruiting company RecruitiFi. It was moderated by Spencer Ante, the co-founder of WhoWeUse, a crowdsourced service referral startup. As the sharing economy expands and grows, so too, has the number of competitors in the space. For example, Uber now shares the ride-hailing technology space with players like Lyft and Sidecar.

Feeling the breath of your competitors on your neck is good for you. In a market without other startups nipping at your heels, you begin to gain a sense of false confidence, Lorenzo says. "The best thing that can happen to you is a competitor enters your space and then you think, "Oh, shit, I have got to do something.'"

For entrepreneurs creating a new industry -- one that may even ask consumers to change their behavior -- your competition can also be your teammate in a counterintuitive sort of way, said Wrede Petersmeyer, the New York City manager for Airbnb. Just look at the sharing economy: Not long ago, the idea of sharing a car or an apartment with a stranger would have been seen as odd -- and in many parts of the country, it still is. But more companies entering the space has helped shift that social norm. "Our biggest competition in these sharing economies is not necessarily each other, but the misconceptions about the sharing economy," said Petersmeyer.

Related: Mark Cuban: There's No Playing Nice With Your Competition

To new, nervous sharing-economy entrepreneurs, Petersmeyer tells them to relax about the competition -- even welcome it. "You need to sort of embrace your competitors. They are out there convincing who you haven't talked to yet that what you are trying to do is not a weird thing."

It's a delicate balance, though. Once you have joined forces with fellow sharing economy entrepreneurs to work to change public perception, then you have to go back to thinking of yourself and making your own product the best available, said Petersmeyer.

As the cliche goes, keep your friends close and your enemies closer.

Related: Why (and How) You Should Befriend Your Competitors

Catherine Clifford

Senior Entrepreneurship Writer at CNBC

Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

The Side Hustle He Started in His College Apartment Turned Into a $70,000-a-Month Income Stream — Then Earned Nearly $2 Million Last Year

Kyle Morrand and his college roommates loved playing retro video games — and the pastime would help launch his career.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Science & Technology

Why We Shouldn't Fear AI in Education (and How to Use It Effectively)

Facing resistance to new technologies in the educational process is nothing new, and AI is no exception. Yet, this powerful tool is set to overcome these challenges and revolutionize education, preparing students and professionals for a future of unparalleled efficiency and personalized learning.

Growing a Business

How to Determine The Ideal Length of Your Marketing Emails Your Customers Will Actually Read

Wondering how long your marketing emails should be? Here's what consumers say — so you can send them exactly what they like.

Business News

A Former Corporate Lawyer Now Makes Six Figures on YouTube — Here's How She Does It

Here are the secrets to starting and growing a successful YouTube channel, according to a YouTuber with millions of subscribers.

Business News

Y Combinator Helped Launch Reddit, Airbnb and Dropbox. Here's What I Learned From Its Free Startup School.

The famed startup accelerator offers a free course on building a business — and answers five pressing questions for founders.