“We Have No Competition”
Don’t ever say this to a potential investor, banker or business partner. It’s the kiss of death, but I’ve heard hundreds of amateurs say it over the years.
It comes from what I call the Myth of Originality. Most rookie entrepreneurs believe a novel idea is all it takes to break free of the pack. The novel idea is just 2–3% of the game folks. The trick is running with the pack, not ahead of it. Let the pack do the work.
No one is going to steal your business idea. Why? Because most people are by nature lazy (they don’t want to do your heavy lifting) or they are too focused on developing their own business (like you should be).
The key words here include education and execution. When I hear someone claim their start-up has no competition, that tells me there will be a market that needs educating because no competitors have done the groundwork. We all know how to use a juicer (now), but think back to the inventor of the very first juicer. Consumers probably asked, why do I need this when I can just buy juice or I’ll just do it on my own. No, Thanks.
With an uneducated market, you have just tripled or quintupled your overall marketing spend and you run the risk that no one bites and purchases (with cash, not payment terms) your new gadget or business service. It’s tough sledding convincing a market to become loyal to you and make word-of-mouth referrals (for free) to other potential buyers. This is the tricky, risky, and expensive market development phase and nobody but you will want to endure it.
Finally, you need to redefine what “competition” really is. What is the competition for an Airbus 320a jet? Naturally, you think of its direct competitor, the Boeing 737 (like Southwest loves). But what about the much larger passenger jets, and smaller props that can fly into smaller airports with shorter runways. Now add in private jets like Cessna and Lear, who will skim the high-end passengers right out of your first class cabin, and the Amtrak and bus alternatives that will take your low-paying passengers out of those economy seats. Here’s another one: people who decide not to fly at all, and people who used to fly who are choosing “staycations” instead. If the airlines can’t fill lucrative routes, they’re not going to buy planes to fly them.
I hope you can honestly apply this exercise above to all the direct and indirect (substitute) competitors you’re facing. I’d much rather you give me an informed rundown of all your competitors, and how they are helping educate your market ahead of your arrival. Competition is one of the best things that will ever happen to you as you start and grow your business.
Note: this post is part of a series designed for Boomers in their 50’s and 60’s, who are looking to entrepreneurship as the second act to a successful career.
