By strategically sizing up the competition, you can help take your business to the head of the pack.
"I want to take my company to the next level."
I hear these words from CEOs all the time as they talk about their
goals and dreams for their companies.
When I push for the details, the
conversation tends to get a little murky. It's usually just a recap of
how the company has been performing recently. The conversation always
ends with a statement of aspiration, "I just know we are ready to really
grow."
Certainly, set your goals for the stars. Along the way, however, you
need to pass the runner in front of you before you overtake the
record-setter at the front of the pack. If you have ever raced, you know
the importance of focusing on the racer right in front of you as you
look for your opportunity to pass.
What to do:
1. Study the pack
Pick out the market leader. Now pick out the one-to-three competitors
who are at the next level ahead of you. Take your ego out of the
conversation as much as possible and put your analyst hat on. What
separates the pack into their current positions? These layers in the
market are often set by what the market values. The question should be,
what criteria are being valued by the customers you want and the
market-share you want to take? If you can determine those elements, you
can plan your company's stepping-stones for growth.
2. Emulate, eliminate, differentiate and overtake
You've done your homework on your competitors. Now look at your
company. In the comparison between you and them, what are the
characteristics that are making them successful? This is no time for
emotional self-indulgence. Focus on what is worthy of emulation, what
should be eliminated from your costs and offerings, what truly
differentiates them from you, and what it will take to overtake them.
3. Build your race strategy one competitor at a time
There are lots of things to learn from the market leaders. I believe
in learning from the best practices of the best players. However, the
company who is ahead of you is your focus in the short-term. Market
performers have a tendency to cluster around similar components of
success. Figure out those cluster formulas.
A word of caution: This set of strategies is about getting your
company to the next level, but it is not a plateau. As a CEO, building a
strategy exclusively around replicating the successful traits of your
competitors will lead to a flattening growth curve. You need to combine
the winning characteristics of your competitors with your own unique
game-changing strategies. By defining what the next level is, then
identifying how to get there, you can give your team a real plan.
http://www.inc.com/tom-searcy/ceos-set-the-right-next-level-for-your-company.html
Showing posts with label Competitor. Show all posts
Showing posts with label Competitor. Show all posts
10/16/12
How To Beat Copycats
The world is full of fast followers. Every new business immediately
spawns copycats, riffers, and discounters; cheap knock-offs and
traditional players trying to use their brands and size to barge into
new markets. In many cases, when you invent and establish a new product,
service, sector or approach, you actually make it easier for the guys
running right behind you to succeed. Why?
Simple: You need to keep raising the bar on yourself, and your business, before your competitors do it for you. The acid test is, “What’s the best you can possibly be?” The answer is, “Better, for the moment, than anyone else who’s trying to do the same thing.
Of course, just because no one else has done something doesn’t mean you shouldn’t be aiming for it – you can’t let other people’s limitations hold you back. Entrepreneurship means committing to a life of constant awareness (okay, paranoia), continuous change and extreme flexibility, as well as the willingness to eat and to abandon your “offspring” before they run out of steam. If you can’t do it, someone else will do it for you.
A good example of a great company falling asleep at the switch is Nike. Nike owned the athlete for years. They had the coolest shoes, the coolest endorsements, the best technology and the coolest television ads. When the Web came along, they put up a pretty robust site to show off their ads and their products. Then, having fallen in love with their own videos, they sat on their laurels.
It didn’t take long for competitors to figure out that the real athletes weren’t in it for the ads or the glory. They launched web sites that served the real needs of athletes – providing exercise programs, race training regimens, fitness tracking, online connections with like-minded people, athlete and team meet-ups, etc.
In pretty short order, the real athletes--and plenty of weekend warriors-- totally bailed on the Nike sites. The other sites were far more connected to their interests and represented far better uses of their scarce time. Nike opened the door for small, quick competitors to jump in with simple, straightforward tools and applications that let them to eat Nike’s lunch.
How badly did this hurt Nike? We can track the popularity of Nike’s brand online by tracking their Facebook likes. (Yes, there are some questions about fake likes, but since I’m interested in comparative data, we don’t have to worry about those right now.) True, this is only one way of keeping score, but it’s one of the best we have right now. So here’s the “likes” math:
Baseline Players October, 2010 September, 2012
Coke 15 million 50 million
Starbucks 16 million 32 million
Athletic Brands
Converse 7.4 million 33 million
Adidas 4.8 million 15.7 million
Nike 2.5 million 10.5 million
When you look at these numbers, it’s clear that Nike really isn’t in the same league as the big dogs.
Raising the bar means that you need to constantly make yourself obsolete regularly cannibalize your products and services. The rate of change is autocatalytic – each change creates the next at a faster rate, and leading to disruption and radical obsolescence. It’s all driven by virality and almost perfect cross-market intelligence. If you want to stay in the game, keep raising the bar.
Remember: No one cares who made the first version of something. They care about who makes the best version.
http://www.inc.com/howard-tullman/how-to-beat-copycats.html
- They ride on your coattails, your PR and your advertising in every
possible way. They’re not pioneers and they’re not inventing anything.
They’ve just learned to say, “We’re just like X but cheaper or faster or
closer.” Saying, “We’re just like Groupon but better,” saves a ton of
time, money and marketing.
- They lean on your success to establish their own credibility, and to
show their customers that the idea or product works and works well.
- They go to school on your errors and missteps. They save time and money by avoiding first-timer mistakes. They get to enter the product development and delivery cycle at a later and more stable level than you did.
Simple: You need to keep raising the bar on yourself, and your business, before your competitors do it for you. The acid test is, “What’s the best you can possibly be?” The answer is, “Better, for the moment, than anyone else who’s trying to do the same thing.
Of course, just because no one else has done something doesn’t mean you shouldn’t be aiming for it – you can’t let other people’s limitations hold you back. Entrepreneurship means committing to a life of constant awareness (okay, paranoia), continuous change and extreme flexibility, as well as the willingness to eat and to abandon your “offspring” before they run out of steam. If you can’t do it, someone else will do it for you.
A good example of a great company falling asleep at the switch is Nike. Nike owned the athlete for years. They had the coolest shoes, the coolest endorsements, the best technology and the coolest television ads. When the Web came along, they put up a pretty robust site to show off their ads and their products. Then, having fallen in love with their own videos, they sat on their laurels.
It didn’t take long for competitors to figure out that the real athletes weren’t in it for the ads or the glory. They launched web sites that served the real needs of athletes – providing exercise programs, race training regimens, fitness tracking, online connections with like-minded people, athlete and team meet-ups, etc.
In pretty short order, the real athletes--and plenty of weekend warriors-- totally bailed on the Nike sites. The other sites were far more connected to their interests and represented far better uses of their scarce time. Nike opened the door for small, quick competitors to jump in with simple, straightforward tools and applications that let them to eat Nike’s lunch.
How badly did this hurt Nike? We can track the popularity of Nike’s brand online by tracking their Facebook likes. (Yes, there are some questions about fake likes, but since I’m interested in comparative data, we don’t have to worry about those right now.) True, this is only one way of keeping score, but it’s one of the best we have right now. So here’s the “likes” math:
Baseline Players October, 2010 September, 2012
Coke 15 million 50 million
Starbucks 16 million 32 million
Athletic Brands
Converse 7.4 million 33 million
Adidas 4.8 million 15.7 million
Nike 2.5 million 10.5 million
When you look at these numbers, it’s clear that Nike really isn’t in the same league as the big dogs.
Raising the bar means that you need to constantly make yourself obsolete regularly cannibalize your products and services. The rate of change is autocatalytic – each change creates the next at a faster rate, and leading to disruption and radical obsolescence. It’s all driven by virality and almost perfect cross-market intelligence. If you want to stay in the game, keep raising the bar.
Remember: No one cares who made the first version of something. They care about who makes the best version.
http://www.inc.com/howard-tullman/how-to-beat-copycats.html
2/29/12
Caution: Your Business Is Not Irreplaceable
It is easier than ever for your customers to find your competitors. Make sure they do not need to.
For anyone who has read any of my articles in the past you may pick up on a distinct theme. As with many writers I draw inspiration from my life experiences and how those experiences shape my views on business, customer service and the like. So without further adieu, what happened today?
At The Trademark Company we have created a great place to work. Happy hours. Trips to local sporting events. Other corporate events. One of these traditions is that no one should work on their Birthday, or at least not a full day. So whenever we have a birthday in the office the tradition is the birthday boy or girl comes in, checks their messages, yadda yadda yadda, we have lunch, a sugar bomb cake and send them on their way to enjoy the rest of the day off.
So today it fell on me to get the cake. I know that our birthday girl loves ice cream cake so I planned on picking one up for her just before the lunch. No worries, I thought, the ice cream store that makes the best ice cream cakes is two blocks away. I’ll just swing up at 11:30 a.m., just before the lunch, and grab one of their delectable morsels. Okay, so I waited till the last minute. My bad.
When I got to the store I pulled on the handle. The door would not open. Like all people faced with a door that will not open I curiously looked at the seam between the door and the frame to see if the lock was engaged. To my surprise it was. Hmmmm, I thought, why is the door locked in the middle of the day? Looking inside I could see the employees standing around. Some working on cleaning counter tops, some just chatting away. I stepped back looking for an hours of operation sign. There it was, posted clear as day: Winter Hours, M-F, 12 p.m-6 p.m. Ahhh, I thought realizing I would soon be on the way to forage for another place that makes ice cream cakes.
But to my good fortunate, or so I thought, an employee came to the door. It was now 11:45 a.m. Awesome. He is going to let me in early so I can buy a cake. To my chagrin, however, he just looked at me from the other side of the window and shrugged his shoulders as if to say “Sorry bud, we’re closed.” Got that from the sign, thanks. But since I figured I was here, he was there, I was one twist of a wrist on a latch lock from achieving my objective. So I decided to sweeten the deal. I opened my wallet and pulled out a bundle of twenties. As a married man with children it is not often I actually have cash in my wallet. But today was my day!
I subtly waived the green at the employee through the window pointing to the display case which held $50 to $75 cakes. This would be a good sale to start the day for a store that averages $4 to $5 per cone. The employee approached the door. My victory was assured. Capitalism had triumphed and in a few minutes I would be bringing back an awesome chocolate chip cookie dough ice cream cake that would be the best sugar bomb we had had in the office in months.
As he stepped forward, however, he shrugged again, pointing to the sign with the hours of operation, and smirked as he walked away to chat with his other employees. Foiled! Commerce and the temptation of an above-average sale had not been enough.
Undaunted, I stuffed my twenties back into my wallet, drove to my local grocery store, and purchased a wonderful Carvel Ice Cream cake. Thank you Carvel! Always great. Available 24 hours a day, 7 days a week.
So how do I twist this morning’s mini-adventure into a business lesson you can use in your business?
1. Your Business is Not Irreplaceable
We have a saying around here that has guided us since day one: answer the phone or someone else will. What does this mean? Quite simply that you must recognize that if you do not answer the proverbial phone your competitors will. With the rise of the Internet and information as a whole now, more than ever, your prospective consumers have choices. Within a few keystrokes on their iPhone they can locate competing services that, if yours are not available, they can use to replace you. Recognizing this you must answer your phone. You must open your store. You must be prepared to offer them what they need when they need it. If not, you’re just a couple of keystrokes away from being a memory.
How do I know? Let’s look at this morning’s example. Where did I get my ice cream cake? From the place I wanted to buy it from? Or the place I could buy it from? Answer the phone! Make the sale.
2. Go Above and Beyond
Many of you may be skeptics. Many may blame me for going out at the last minute to secure our sugar bomb. You all would be right. But at the end of the day I had money and a need to purchase and that is all that should matter when we are talking about a transaction for goods and services. What kept the original store from a good transaction? Simple. A failure to go above and beyond. Specifically, turning a latch and letting a customer in a scant 10 minutes before opening.
Around here every interviewee is given a series of questions to illicit how they would respond to these types of scenarios. The scenario typically begins with an ordinary customer calling in during normal work hours. If that customer states they can only complete the order if you can call them back at 6:00 p.m. what do you do? What if your normal workday ends at 5:00 p.m.? What if you had a dinner planned with a friend at 6:00 p.m.? What happens if you had tickets to the 2012-2013 National Championship Football Game matching the Florida Gators against USC? What would you do? You get the point. Around here we want only people who will go above and beyond or figure out ways to do so.
If one of our employees would have been working the ice cream cake store this morning I would have been stunned if they did not open the door. But let’s assume, just for argument’s sake, some strange requirement like insurance coverage, fumigation, etc. precluded them from unlatching the door. There were a hundred other ways to handle this. For instance, unlatch the door, politely state we do not open for a few more minutes, but if you know what you would like I can have it ready when we open. They could have offered me a discount. Offered to take down my credit card information and have it delivered (recall, there were several of them just standing around holding the floor in place). Anything but what they did would have been better.
In short, even if they were closed and I was admittedly early they still could have gone above and beyond. They didn’t. In return, they lost a sale and I was reminded how easy it is to get one of the competitor’s products. Did I mention how good the Carvel cake was? By the way, it was half the price of the other place that wouldn’t sell me their cake. Think I’m going back?
http://www.inc.com/matthew-swyers/why-your-customers-will-leave-for-your-competition.html
For anyone who has read any of my articles in the past you may pick up on a distinct theme. As with many writers I draw inspiration from my life experiences and how those experiences shape my views on business, customer service and the like. So without further adieu, what happened today?
At The Trademark Company we have created a great place to work. Happy hours. Trips to local sporting events. Other corporate events. One of these traditions is that no one should work on their Birthday, or at least not a full day. So whenever we have a birthday in the office the tradition is the birthday boy or girl comes in, checks their messages, yadda yadda yadda, we have lunch, a sugar bomb cake and send them on their way to enjoy the rest of the day off.
So today it fell on me to get the cake. I know that our birthday girl loves ice cream cake so I planned on picking one up for her just before the lunch. No worries, I thought, the ice cream store that makes the best ice cream cakes is two blocks away. I’ll just swing up at 11:30 a.m., just before the lunch, and grab one of their delectable morsels. Okay, so I waited till the last minute. My bad.
When I got to the store I pulled on the handle. The door would not open. Like all people faced with a door that will not open I curiously looked at the seam between the door and the frame to see if the lock was engaged. To my surprise it was. Hmmmm, I thought, why is the door locked in the middle of the day? Looking inside I could see the employees standing around. Some working on cleaning counter tops, some just chatting away. I stepped back looking for an hours of operation sign. There it was, posted clear as day: Winter Hours, M-F, 12 p.m-6 p.m. Ahhh, I thought realizing I would soon be on the way to forage for another place that makes ice cream cakes.
But to my good fortunate, or so I thought, an employee came to the door. It was now 11:45 a.m. Awesome. He is going to let me in early so I can buy a cake. To my chagrin, however, he just looked at me from the other side of the window and shrugged his shoulders as if to say “Sorry bud, we’re closed.” Got that from the sign, thanks. But since I figured I was here, he was there, I was one twist of a wrist on a latch lock from achieving my objective. So I decided to sweeten the deal. I opened my wallet and pulled out a bundle of twenties. As a married man with children it is not often I actually have cash in my wallet. But today was my day!
I subtly waived the green at the employee through the window pointing to the display case which held $50 to $75 cakes. This would be a good sale to start the day for a store that averages $4 to $5 per cone. The employee approached the door. My victory was assured. Capitalism had triumphed and in a few minutes I would be bringing back an awesome chocolate chip cookie dough ice cream cake that would be the best sugar bomb we had had in the office in months.
As he stepped forward, however, he shrugged again, pointing to the sign with the hours of operation, and smirked as he walked away to chat with his other employees. Foiled! Commerce and the temptation of an above-average sale had not been enough.
Undaunted, I stuffed my twenties back into my wallet, drove to my local grocery store, and purchased a wonderful Carvel Ice Cream cake. Thank you Carvel! Always great. Available 24 hours a day, 7 days a week.
So how do I twist this morning’s mini-adventure into a business lesson you can use in your business?
1. Your Business is Not Irreplaceable
We have a saying around here that has guided us since day one: answer the phone or someone else will. What does this mean? Quite simply that you must recognize that if you do not answer the proverbial phone your competitors will. With the rise of the Internet and information as a whole now, more than ever, your prospective consumers have choices. Within a few keystrokes on their iPhone they can locate competing services that, if yours are not available, they can use to replace you. Recognizing this you must answer your phone. You must open your store. You must be prepared to offer them what they need when they need it. If not, you’re just a couple of keystrokes away from being a memory.
How do I know? Let’s look at this morning’s example. Where did I get my ice cream cake? From the place I wanted to buy it from? Or the place I could buy it from? Answer the phone! Make the sale.
2. Go Above and Beyond
Many of you may be skeptics. Many may blame me for going out at the last minute to secure our sugar bomb. You all would be right. But at the end of the day I had money and a need to purchase and that is all that should matter when we are talking about a transaction for goods and services. What kept the original store from a good transaction? Simple. A failure to go above and beyond. Specifically, turning a latch and letting a customer in a scant 10 minutes before opening.
Around here every interviewee is given a series of questions to illicit how they would respond to these types of scenarios. The scenario typically begins with an ordinary customer calling in during normal work hours. If that customer states they can only complete the order if you can call them back at 6:00 p.m. what do you do? What if your normal workday ends at 5:00 p.m.? What if you had a dinner planned with a friend at 6:00 p.m.? What happens if you had tickets to the 2012-2013 National Championship Football Game matching the Florida Gators against USC? What would you do? You get the point. Around here we want only people who will go above and beyond or figure out ways to do so.
If one of our employees would have been working the ice cream cake store this morning I would have been stunned if they did not open the door. But let’s assume, just for argument’s sake, some strange requirement like insurance coverage, fumigation, etc. precluded them from unlatching the door. There were a hundred other ways to handle this. For instance, unlatch the door, politely state we do not open for a few more minutes, but if you know what you would like I can have it ready when we open. They could have offered me a discount. Offered to take down my credit card information and have it delivered (recall, there were several of them just standing around holding the floor in place). Anything but what they did would have been better.
In short, even if they were closed and I was admittedly early they still could have gone above and beyond. They didn’t. In return, they lost a sale and I was reminded how easy it is to get one of the competitor’s products. Did I mention how good the Carvel cake was? By the way, it was half the price of the other place that wouldn’t sell me their cake. Think I’m going back?
http://www.inc.com/matthew-swyers/why-your-customers-will-leave-for-your-competition.html
1/31/12
Know Thy Enemy, Befriend Rivals
Scrutinize your competitors, and become friends with them, too. You just
might partner to pitch a client, buy one out (or vice versa), or grow
the industry together.
Here's a truth: At BzzAgent, the word-of-mouth marketing firm where I'm CEO, I go to ridiculous extremes to obtain information about our competitors.
I scan Crunchbase, study websites, and download mobile apps. I troll shamelessly for gossip about our rivals' executive teams and star players. And occasionally—when I'm really on my game—I hit pay dirt and obtain a competitor's proposal to a client. And when that happens, our team goes to work. We dissect it for valuable bits of information about our opponents' pricing models, positioning, and capabilities. And it's this information that allows us to accelerate our innovation, understand where our competitors are strong—and determine how we can exploit their weaknesses.
For instance, from one proposal we learned that our flat-fee model was being devalued by another company's "cost-per-engagement" pricing. We created a strategy to counter that objection with clients and prospects. And a few years ago, we got the inside scoop on a new opponent's practice of throwing in-home product-distribution parties for marketers and got ahead of market by developing the next evolution of the concept.
We're also interested in information about our competitors' processes. For a while, one rival company responded to email queries by tersely exclaiming that they only accepted clients who had a minimum of $1 million to spend. Hey, we were happy to accept those that 'just missed' that criteria. In another case, a company that tracks social influence positioned itself as a competitor to us—but inside information proved that their engineering-first culture could be perceived as unfriendly to clients. Our awareness of that issue was the foundation for a very lucrative partnership discussion.
Sun Tsu said it best: "…know thy enemy." As a strategy, this means more than the collection and dissection of as much information on your competitors as possible. Alongside minor cloak-and-dagger data gathering, you should also be developing real, personal relationships with people at all levels of your competitor's businesses. Just as much value—possibly even more—can come from a direct relationship. Why not identify and tackle common challenges and goals? Growing an industry is often about the sum of its parts. With a rival, you might create standards or align to compete against a regulation. Heck, you may even partner to win a big client.
And if you're leading an organization and aren't similarly fixated on both knowledge-gathering strategies, you are putting your company at great risk.
I wasn't always so obsessed. At one time, I thought BzzAgent was untouchable. I believed we could always stay one step ahead of the competition. I was convinced that what we did was often right and what our rivals did was often wrong. Of course we would continue to evolve and they would remain static. But I was wrong.
Many a corporate pundit will tell you to just focus on your own business. Don't get distracted by the competition, they will say. In our case, we were so focused on ourselves that we failed to look up in time to see how things had evolved. We were the first entrant into the space in 2001, and for many years we were considered the only game in town. We didn't have to outpitch anyone. We just had to be us. When competitors finally showed up around 2005, we mocked the fact that they weren't nearly as knowledgeable as we were. We were confident they lacked our experience. We thought their variations on our model wouldn't significantly impact us. But by 2008, we found ourselves losing more projects than we were winning. Competitors had learned how to pitch against us. Their innovations weren't to be mocked; they were to be admired.
I realize now that this happened because competition is different today than it was just a few decades ago. Business in general is moving much faster and ideas can be replicated on the cheap. Competitors—and even companies not yet in your space—will adapt and learn and find ways to become better than you. They are nimble and they will adapt. And while they may falter, it's a much better bet to figure they probably won't. Competitors are often smarter than you think they are, and if you turn a blind eye to them—or even blink for a moment—they're going to eat your lunch. If you care at all about the organization you're leading, gathering significant information about your competitors isn't useful. It's not something that might be worth your time. It's something you must do.
At Smarterer, a Google-backed startup where I'm executive chair, we watched as Gild, a company that had been only tangentially related to us, deployed an almost-exact replica of our solution, which gives people a score based on how adept they are at things like Excel and PHP and Photoshop. While initial reactions included hand-wringing and disappointment at being imitated so closely, we eventually settled on a valuable realization: There is no longer first-mover advantage. This has been replaced by an ability-to-adapt advantage. For those who are willing to gather as much information as possible, react, and innovate ahead of rapid market shifts, success will be inevitable. For those who fail to pay attention to everything happening around them, getting overtaken is the only possible outcome. Yes, it's still true that if you have a good idea, at least 10 other people are doing the same thing—but now they're watching you as closely as you should be watching them.
But you shouldn't consider your competition the evil enemy. They exist for the very same reason you do, and in most cases rising tides do in fact lift all boats. When it came time to sell BzzAgent (we were acquired by Tesco in July 2011), we had a number of direct competitors that became potential suitors, solely because we had shared a beer at one point or worked together on authoring an ethical code for the industry. You might not end up as BFFs, but having a competitor as a "frenemy" can be incredibly valuable.
How do you get there? The route to a competitor relationship begins simply: Pick up the phone and call them. Don't wait; just do it. Or actively seek out your competitors at a conference and introduce yourself. Let them know what you admire about them and offer to share an ingredient in your "secret sauce." Follow up and follow through. Send holiday cards; share client stories. This will break down the barriers that hamper your ability to learn from others and grow your business. The information you gather will be a critical asset that will help you stay ahead in your industry.
And if a frenemy asks, don't lie. You can say, "Yes, we do have copies of your proposals. Know what? I'll send you one of mine. After all, maybe we can learn something from one another."
http://www.inc.com/dave-balter/start-up-strategy-know-thy-enemy-befriend-rivals.html
Here's a truth: At BzzAgent, the word-of-mouth marketing firm where I'm CEO, I go to ridiculous extremes to obtain information about our competitors.
I scan Crunchbase, study websites, and download mobile apps. I troll shamelessly for gossip about our rivals' executive teams and star players. And occasionally—when I'm really on my game—I hit pay dirt and obtain a competitor's proposal to a client. And when that happens, our team goes to work. We dissect it for valuable bits of information about our opponents' pricing models, positioning, and capabilities. And it's this information that allows us to accelerate our innovation, understand where our competitors are strong—and determine how we can exploit their weaknesses.
For instance, from one proposal we learned that our flat-fee model was being devalued by another company's "cost-per-engagement" pricing. We created a strategy to counter that objection with clients and prospects. And a few years ago, we got the inside scoop on a new opponent's practice of throwing in-home product-distribution parties for marketers and got ahead of market by developing the next evolution of the concept.
We're also interested in information about our competitors' processes. For a while, one rival company responded to email queries by tersely exclaiming that they only accepted clients who had a minimum of $1 million to spend. Hey, we were happy to accept those that 'just missed' that criteria. In another case, a company that tracks social influence positioned itself as a competitor to us—but inside information proved that their engineering-first culture could be perceived as unfriendly to clients. Our awareness of that issue was the foundation for a very lucrative partnership discussion.
Sun Tsu said it best: "…know thy enemy." As a strategy, this means more than the collection and dissection of as much information on your competitors as possible. Alongside minor cloak-and-dagger data gathering, you should also be developing real, personal relationships with people at all levels of your competitor's businesses. Just as much value—possibly even more—can come from a direct relationship. Why not identify and tackle common challenges and goals? Growing an industry is often about the sum of its parts. With a rival, you might create standards or align to compete against a regulation. Heck, you may even partner to win a big client.
And if you're leading an organization and aren't similarly fixated on both knowledge-gathering strategies, you are putting your company at great risk.
I wasn't always so obsessed. At one time, I thought BzzAgent was untouchable. I believed we could always stay one step ahead of the competition. I was convinced that what we did was often right and what our rivals did was often wrong. Of course we would continue to evolve and they would remain static. But I was wrong.
Many a corporate pundit will tell you to just focus on your own business. Don't get distracted by the competition, they will say. In our case, we were so focused on ourselves that we failed to look up in time to see how things had evolved. We were the first entrant into the space in 2001, and for many years we were considered the only game in town. We didn't have to outpitch anyone. We just had to be us. When competitors finally showed up around 2005, we mocked the fact that they weren't nearly as knowledgeable as we were. We were confident they lacked our experience. We thought their variations on our model wouldn't significantly impact us. But by 2008, we found ourselves losing more projects than we were winning. Competitors had learned how to pitch against us. Their innovations weren't to be mocked; they were to be admired.
I realize now that this happened because competition is different today than it was just a few decades ago. Business in general is moving much faster and ideas can be replicated on the cheap. Competitors—and even companies not yet in your space—will adapt and learn and find ways to become better than you. They are nimble and they will adapt. And while they may falter, it's a much better bet to figure they probably won't. Competitors are often smarter than you think they are, and if you turn a blind eye to them—or even blink for a moment—they're going to eat your lunch. If you care at all about the organization you're leading, gathering significant information about your competitors isn't useful. It's not something that might be worth your time. It's something you must do.
At Smarterer, a Google-backed startup where I'm executive chair, we watched as Gild, a company that had been only tangentially related to us, deployed an almost-exact replica of our solution, which gives people a score based on how adept they are at things like Excel and PHP and Photoshop. While initial reactions included hand-wringing and disappointment at being imitated so closely, we eventually settled on a valuable realization: There is no longer first-mover advantage. This has been replaced by an ability-to-adapt advantage. For those who are willing to gather as much information as possible, react, and innovate ahead of rapid market shifts, success will be inevitable. For those who fail to pay attention to everything happening around them, getting overtaken is the only possible outcome. Yes, it's still true that if you have a good idea, at least 10 other people are doing the same thing—but now they're watching you as closely as you should be watching them.
But you shouldn't consider your competition the evil enemy. They exist for the very same reason you do, and in most cases rising tides do in fact lift all boats. When it came time to sell BzzAgent (we were acquired by Tesco in July 2011), we had a number of direct competitors that became potential suitors, solely because we had shared a beer at one point or worked together on authoring an ethical code for the industry. You might not end up as BFFs, but having a competitor as a "frenemy" can be incredibly valuable.
How do you get there? The route to a competitor relationship begins simply: Pick up the phone and call them. Don't wait; just do it. Or actively seek out your competitors at a conference and introduce yourself. Let them know what you admire about them and offer to share an ingredient in your "secret sauce." Follow up and follow through. Send holiday cards; share client stories. This will break down the barriers that hamper your ability to learn from others and grow your business. The information you gather will be a critical asset that will help you stay ahead in your industry.
And if a frenemy asks, don't lie. You can say, "Yes, we do have copies of your proposals. Know what? I'll send you one of mine. After all, maybe we can learn something from one another."
http://www.inc.com/dave-balter/start-up-strategy-know-thy-enemy-befriend-rivals.html
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