There are tons of people out there who have great ideas for new startups. However, most of them never actually act on them. Obviously, there are many different reasons for this. For some it may be because they lack the time, others do not want to take any risks, and some possible entrepreneurs are discouraged because there is already another company in the market that does a similar thing.
At the end of the day, these are all valid excuses. But that is all they are. Excuses. If you really want to start your own business, you will have to face all the issues mentioned above. You will find hardly any entrepreneurs who feel like they have time to spare, or who did not have to take any risks. And most importantly, you will never find any entrepreneurs who will tell you they don’t have competition. And you know what, that is a good thing.
Just think about the very basic things you do with your company. Maybe you are selling a certain product. Fair enough. But why do people buy your product? It’s pretty simple. They buy it because it satisfies a need. So at the end of the day you are not only offering a product, but more importantly you are offering a way to satisfy needs. This is a critical change of perspective.
If you look at your business from this perspective, you will soon realize that you are not only competing with companies that offer the same product, but with a whole bunch of other companies that offer seemingly different products as well. For instance, if you are selling ice cream on a hot and sunny day, you might think that you are mainly competing with other ice cream sellers. But that’s not quite right. In fact, you are also competing with the kid next door who sells lemonade.
Most people buy ice cream because they feel like they need a sweet refreshement. Both ice cream and lemonade could potentially satisfy this need. So if your potential customers chose to buy lemonade, they are probably not going to buy ice cream from you anymore. Because you know, that too much of that sweet stuff is unhealthy, right?
This thought can be pursued even further. If your potential customers have access to a swimming pool they have other means to cool themselves down and get a refreshing experience, so they might not even feel like eating ice cream anymore. So even products from a whole other industry might compete with your products.
Now, this may appear rather intimidating if you are thinking about starting your own business. Why even bother if there are so many competitors? It’s simple: because competition proves that there is a need. If there is nobody who satisfies the same needs that you are targeting with your product, in most cases there is no need for it either. Literally. This is important to keep in mind. Even if you are the first one who comes up with a new product, there are probably others that target the same needs.
Of course that does not mean your idea is not new or innovative. It actually means that you might be on to something. If your product is able to satisfy the same needs better than the existing products (from other companies or industries) then you have a chance to be successful. You “just” have to be better. In fact, this is how most disruptive innovations start.
Just keep that in mind next time you talk to a potential investor. They will always ask about your competition. Whatever you do, don’t tell them you don’t have competition. Talk about the needs you are targeting, how you are targeting them and why that’s better than what is being done at the moment. There is no such thing as no competition.
In a nutshell
Companies are selling products and services. More importantly however, they are selling ways to satisfy needs. This is a critical change of perspective. If you look at your business from this point of view, you will soon realize that you are not only competing with firms that offer the same product, but with a whole bunch of other companies that offer different products but target the same needs. Even if you are the first one who comes up with a new product, there are probably other competitors that satisfy the same needs. So at the end of the day competition is a good thing because it proves that there is a need for what you do.