That's My Idea! How to Deal With Competition as an Entrepreneur
You have a brilliant idea. It’s a winner—you’re sure of it. You’ve told your friends, purchased the domain name, and written a business plan. But before you can take the next step, you discover that another company is already moving forward with a similar idea. Now what? Should you quit? Complain? Crumble?
Though it’s easy to feel defeated, let’s not to be too hasty. What if Richard Branson had come across British Airways and decided that he’d best not launch an airline? I, for one, would have been very sorry to miss Virgin Airlines come in and change the game.
The reality is, competitors will always exist—no matter what you do. So, rather than approach competition with dread, you should view your competitors as the impetus for innovation and fuel to do things differently (and better!). To help change your mindset, let’s bust some common myths about how to view and handle competition.
Myth #1: Ideas Are Original
Let’s start by clearing up this juicy piece of fiction. Truth be told, there are very few truly original ideas. This may sound depressing at first, but it’s actually very liberating. Once you realize the world is teeming with interesting nuggets of ideas just waiting to be infused with your own twists and insights, you can stop waiting for that cartoon-like light bulb moment—and start creating.
Think about it: Ideas don’t usually pop into your head out of nowhere—they often build on previous strokes of genius (yours or others’) or reinvent an existing idea in a new context. Even Newton’s legendary Law of Gravitation was the result of building on a combination of two of Galileo’s theorems: the Law of Inertia and the Law of Elliptical Path. The point of this is to say: Competition is inevitable—it’s how you deal with it that really counts.
Myth #2: Similarities Matter
With that misconception out of the way, let’s talk about what to do when you inevitably spy a competitor who’s already launched “your” idea. First, stay cool—resist the urge to wail about how unfair it is, and instead, define and sharpen what makes you different. Regardless of your industry, there should be at least one thing your company does with a little more something—more care, more passion, more simplicity, more humor—you decide! Once you find that point of difference, build it up, exaggerate it, and incorporate it into all you do.
For example, when I was writing the business plan for Never Liked It Anyway, I came across ExBoyfriendJewelery.com—a direct competitor. Rather than take that as my cue to give up, I saw it as a mandate to define my point of difference, which I decided was my cheeky and irreverent brand voice. So, I leaned into this attitude, dialed it up, and infused it throughout my business—from the brand name, to the marketing plan, to the site’s content. Everything about my brand had to scream “Sassy, cheeky, and moving on!” in order to set it apart.
When you spot a competitor, remember: Look for the differences—not the similarities.
Myth #3: Keeping Close Watch is a Good Thing
While it’s important to watch your competition and be aware of the tricks they have up their sleeves, make sure you stop short of stalking. I know it’s temping—but myopically focusing on competition is a big innovation killer. When your entire focus is on your competitors, you’ll start to believe that their innovations are the only possibilities for you and your company, too.
Let’s look at the world of instant coffee for a perfect example: Coffee Brand A adds flavor. So, Coffee Brand B follows suit. Then, Brand A launches mini-sachets—and Brand B does the same. This game of innovation ping-pong has everyone's heads whipping back and forth so fast that both brands miss opportunities for potential new ideas. While Brand B was waiting to see what Brand A was going to do next, Brand C—also known as Nespresso—streaked ahead by inventing an elegant coffee system ready to deliver café-style coffee in your very own kitchen.
Yes, it’s important to keep an eye on the competition—but just one. The other needs to be looking beyond your competition for new insight and ideas.
Myth #4: Direct Competition is Your Only Competition
It’s easy to consider your competition as only companies that offer similar products. But in reality, your competition is much broader than that—it’s everyone and everything that competes for mindshare of your consumer. For example, if Listerine had felt bound by the bathroom cabinet and only seen other toothpastes, mouthwashes, and floss as competition, their innovations would have quickly grown tiresome. Instead, they considered their competition on a broader level—including handbags, breath mints, and candy. Ultimately, this unlocked the idea for Listerine Breath Strips: portable breath fresheners in a candy format.
Considering your competition on a broader level can be a great source of inspiration. Whether it’s a coffee store, app, boutique, or airline, you should be looking with a critical eye for sparks of inspiration. It’s perfectly feasible to imagine that Spotify drew inspiration from Netflix’s video streaming model and applied the same rationale to music, or that the Bike Shares in London (and now NYC) drew inspiration from Zipcar’s “access, not ownership” model. When you approach the idea of competition with an open mind, it suddenly moves from terrifying to exciting.
As entrepreneurs, let’s challenge ourselves to embrace competition and use it as fuel to innovate and move forward. The most successful entrepreneurs and companies make this way of thinking a habit. They frequently look for what’s out there—in a very broad sense—and see how they can take what they find and make it better and more meaningful for their customers. Not only is this a more stimulating and exciting approach to entrepreneurship—it’s also the most effective.
Photo of woman thinking courtesy of Shutterstock.
Annabel Acton founded the website Never Liked It Anyway in January 2012, after working for 7 years as an innovation and branding consultant in Sydney, London and New York. Naturally entrepreneurial and inspired by ideas, Annabel soaks up the energy of the startup world and enjoys meeting, developing and partnering with other entrepreneurs.More from this Author