Previously, in our focus on market expansion, we talked about culture. Today, we’re all about competition.
Competition is at the heart of entrepreneurship. Knowing who your competitor is key. Many startup founders like to think that their startup is “unique.” It very well may be — but every company has a competitor. Knowing yours is important.
“But I don’t have a competitor.” If this indeed the case, you might be wise to consider whether your product or service will succeed. In the case of no-competition, the market may not be ready for you. Take sliced bread.
Otto Rohwedder, an American inventor based in Iowa, made the first bread slicer in 1912. That was, unfortunately, destroyed in a fire. His next effort came to fruition in 1928. But even then, bakers weren’t interested in his invention, fearing that slicing up bread would leave it stale. It wasn’t until Wonder Bread collaborated with Rohwedder to make its iconic sliced bread that he succeeded.
Another thing to know about competition is the customer. You may have a superior product or service than your competitor. But if your competitor is better known than you, you have to work on what makes you stand out. What do you offer that your competitor doesn’t? Is it flexibility? Is it customer service? Your offering has to be substantially better than your competitor so customers can choose you or switch to you.
Blockbuster never saw Netflix as a threat. In the late 1990s and early 2000s, it had the majority market share on video borrowing. While Blockbuster kept going at its own winner’s pace, Netflix focused on what customers craved — flexibility. It was work to go to and from Blockbuster. It was so much easier to receive and send movies through the mail. Where is Blockbuster today? That’s an important lesson. Always look for the gaps.
Next, we’ll consider operational mechanics.