Competitors Are Not The Enemy
There are lots of things that startups should fear. Competition isn’t one of them.
I started an online socks company almost 3 years ago. Since then there have been a number of competitors that have launched in South Africa. I started Nic Harry because I had been wearing a brand called Happy Socks and wanted more. Happy Socks is the gorilla in the sock room with distribution in over 6500 stores globally. They are massive competition for me.
The reason I bring this all up is that recently I’ve been receiving a lot of tweets, emails and phone calls telling me about my competitors and what they do and how they do it. Many people are shocked that anyone else is copying my idea (colourful socks are not my original idea btw) and doing it so brazenly. Some people point out amazing things that other brands are doing and ask “have you considered something like that?”. While others point to the perceived success that said competitor is having and “doesn’t that worry you?”.
I love that people are interested enough in my brand to take the time to point out my competitors. It means they’re thinking about Nic Harry and that they love what we do. I appreciate that but I’m not listening when you talk about my competitors.
Let’s talk about competitors.
Competitors are many things but they are certainly not the enemy. Competitors prove that there is a market for you to try and own. I’ve never seen a product that exclusively dominates a market.
I own many pairs of sneakers, various denim brands, I’ve owned a few different car brands over the years as well as multiple mobile devices and the truth is that one of those opened me up to an entirely new way of thinking that inevitably led me to their competitors. This experience helps to grow the market size, not shrink it.
A rising tide lifts all ships, as they say. So from where I stand (yes, on my socks) the more my competitors can open the market up, the more people I have to sell to and win over.
If, after all of this, you are wondering who is the enemy, let me tell you…
Bad Design Is the Enemy
A fundemental focus in my business is design. The logo design, sock design, product design, the design of our brand aesthetic, the store design which embodies our brand aesthetic, the scent that we’ve developed so that you can smell our brand, our website, emails, tweets, instagrams and everything inbetween. Design is everything.
When I look at my competition occassionally, I understand that placing such a great focus on my design and brand from day 1 has been a critical differentiator but it had nothing to do with them. It was a decision we made on our own, to be great at design.
A Weak Product Is The Enemy
You can have the best market position, the most customers, the best design in the world and fantastic distribution but if your product is weak everything falls down.
Get your product right and the rest will follow.
Bad Cashflow Is The Enemy
Well done. You now have great design and a great product. But if your sales aren’t growing and the money isn’t coming in then you’ve got a problem. Sometimes great design and a good product aren’t enough. Yes, it sounds like I’m contradicting myself. This shit is complicated and there’s no quick fix.
If your sales are going down in the face of a great product and amazing design then you’re missing a trick. Something is wrong and you best get back on the bus and figure it out.
In one of my previous businesses we built technology that allowed end users to create mobile social networks using their phones. We had a good product and users but we weren’t making any money. No one wanted to pay us for the service. The product eventually had to change and major shifts had to take place.
Sales are imperative. Without money coming in you aren’t really a business.
Small Margins Are The Enemy
You think your competitors are killing it. You feel like they are everywhere. You project that they’re doing huge turnover every month.
But the truth is that you don’t know their business. You don’t know what their margins are. You don’t know what they’re paying themselves (maybe they’re paying themselves too much and have less cash in the bank than they should). There are so many variables in the equation that it makes my brain hurt.
What you do know is your own margins and cost base. Focus on that. Jeff Bezos is famous for trying to squeeze margin out of his suppliers and partners so he can pass the savings onto his customers. For Amazon, margin means customer satisfaction and therefore growth.
Don’t focus on what your competitors might be doing, focus on how you can improve your margins.
Customer Churn Is The Enemy
I love hearing about my competitors and how happy their customers are. I love hearing that because I know they can’t sustain that happiness as well as I can in my business.
We go out of our way to make sure we get and then keep the best customers for our brand. We don’t lose customers that often and when we do we try our fucking hardest to get them back.
Losing customers can destroy your business for obvious reasons but sometimes it’s not obvious that you’re losing them so pay attention.
Distractions Are The Enemy
It’s easy to jump onto Twitter, Instagram, Pinterest, Facebook or any other distracting social media platform and search for your competitors. It’s easy to feel like they’re outpacing you in the world when you look at their social stats but it’s important to remember that brands on social media shows the world what they want the world to see.
No business is going to post their terrible third quarter sales figures to their Twitter account or Facebook page. They’re going to talk about their TV interviews, their PR and other vanity metrics to make themselves feel better about their shitty performance.
Keep your head down, focus on your strategy and build your business. Ignore the distractions, they are the enemy.
Weak Strategy Is The Enemy
Blindly building things can sometimes lead to magic. But that’s very rare and probably not you or me.
On the whole, great businesses are built through hard work, determination and on a premise that a problem exists that needs to be solved. Once the business is alive, a carefully planned (and sometimes reactionary) strategy has to be crafted and executed.
If you focus on your competitors too much you will lose sight of your brand strategy. If this is happening to you maybe it’s because you don’t fully back your strategy and decisions. Maybe you need to refocus on your own strategy and ignore your competitors for a few months while you get your house in order.
I’d rather (and do) ignore my competitors as much as possible. I try to educate myself and build the right strategy for my business in the world right now and for where I see it moving to in the next ten years.
Bad Execution Is The Enemy
It’s great that you have all the moving parts taped down and ready to go. If you can’t manage the execution perfectly then the chances are, you’re going to struggle whether you have competitors or not.
If you get distracted and focus too intensely on what everyone else is doing you’re going to screw up what you’re doing and execute badly.
Bad Customer Service Is The Enemy
Customer service is easy to do and can become a huge differentiator for your business.
Customer service has become so important because there are so many options available to consumers. The Internet and ecommerce have allowed consumers to buy product from, quite literally, anywhere in the world. You are competing on a global scale whether you want to admit it or not. You better up your game and compete with the best, not the competitors closest to you geographically.
Ignorance is the enemy
Don’t be ignorant about your industry, competitors, trends and insights. Take time to read about how the greats think, work and plan. Research industry trends and stay on top of the movers and shakers in the space.
I often bump into the founders of other businesses that compete with me directly and engage them in conversation about what we do and what they do. I even make plans to see some of them on a monthly basis. It’s important to remember that keeping in touch is not the same as obsessing over. Keep in touch with your industry, competitors and insights but don’t obsess over them.
If you have a decent grasp on some of the things above then I can confidently tell you to forget about your competitors because you’re doing OK. I often take solace in the fact that very few people can get all of this right all of the time.
The market is always large enough for many players to stake a decent claim and build a valuable business.
You are not playing a zero sum game.
Published in Startups, Wanderlust, and Life Hacking