Rethinking The Idea of Competition
Our natural reflex, when we’re evaluating a market, is to think of competition as being a negative factor. If there is a plethora of companies already operating in a given space, fighting it out for share, our immediate assumption is that this market is “taken” or that adding another player into the mix is a dumb idea.
This might be the case, but then again, it might not.
The very fact that multiple companies operate in the market indicate that there is a need to be served. Individuals (or organizations if it’s a B2B context) are paying for that product or service. So the need has been established.
Secondly, the existence of multiple competing entities indicates that there’s room for more than one operator. No company, unless it’s a monopoly, has a complete lock on any given market. There’s always a leader, a follower (maybe a number) and then there’s always a set of niche or focused players serving sub segments that the big players aren’t interested in or cannot access.
Thirdly, customer needs are never static. A requirement today will not be served in the exact same way into perpetuity - technologies change, environments shift, organizations falter, customer demands evolve. These are certainties, not possibilities. You can almost always bank on it.
So the reflex view of the existence of competition as meaning the opportunity is gone is the lazy way out. To the contrary, it’s a validating factor, a starting point that should push us to ask more pertinent, more probing questions to help uncover the opportunity.
Has the space evolved or has it remained static?
Are there customer needs that are being overlooked? Is there a recurring customer issue that hasn’t been addressed?
Are there niche segments that are being ignored but could be lucrative for a targeted offering?
Can a technology or a process shift or deeper data analytics be deployed to fundamentally alter the way the customer accesses, interacts with or receives value from the product or service on offer?
Most importantly, can I bring something different to the table that ultimately delivers material value to the customer (or a material subset) and hence merits my seat at the table?
Those are the better questions to ask. They allow us to look at the competitive situation in clearer terms, in ways that are opportunity focused, in ways that ensure that we’ve looked at the market more critically and with an eye for real value.