Focus on the road, not the other drivers
I’m on the executive board for a very promising Chicago-based startup. The CEO and CTO consult me weekly (sometimes daily) for my thoughts and advice about various aspects of their business. We often shoot emails back and forth about industry news and events, and the activities of potential acquirers, competitors, etc.
There is one competitor in particular that has been creating a lot of buzz. Each time their competitor makes a big PR splash, I can see / hear the stress on the faces of the entrepreneurs. It’s a natural thing, and to a certain extent it can be helpful. But many entrepreneurs overreact to the activities of the competition.
I used to be quite guilty of managing against the competition, rather than the market. When a competitor announced a new product line, I might feel devastated, thinking that I had ceded part of the market. Meanwhile, when I heard (even anecdotally) that a competitor was suffering, I felt a sense of elation.
The problem is that these emotions, while natural, can cause entrepreneurs to make irrational decisions. There have been times (thankfully long ago), when I mimicked my competitor’s offerings in a dead race to win (yes, I can be rather competitive). But who says your competition is doing the right thing? And even if they are, why can’t you carve out a differentiated niche?
Flickr image courtesy of Koltregasges
Building a business in a competitive market is like rally racing. You’re moving at high speed over uncertain terrain, and any mistake could send you into the trees. Often, you don’t know what is over the next hill or around the next corner. While it is wise to keep an eye on your competitors, the ultimate goal is to move fast along the road (follow the market). The most successful drivers remain calm and focused on the road. Focusing too much on the other drivers will just slow you down.
Don’t worry too much about what the competition is doing. Just focus on following the market (your customers).