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Why Competition Is a Good Thing
We all know that competition is good for consumers. That’s because competition drives innovation, and new, innovative products and services make life better for everyone. Competition also drives down prices, as firms work to one-up each other, making their products incrementally better and, bit-by-bit, less expensive. The more competition there is in a given market, the harder firms have to work to woo customers, which means that the public wins.
But what about the firms themselves? Business owners often assume that competition is something to be avoided. After all, if your competitors do things better than you, they might steal your customers and drive you out of business. From that perspective, it would seem that a market without any competition would be a business owner’s dream. But the truth is that competition is a good thing for customers and the businesses that serve them.
Without competition, there’s no motivation to improve. Complacency takes hold, and mediocrity results. Eventually, your customers may get bored of your services, or your offerings will no longer accommodate their needs, and so they move on.
An industry without competition is a dying industry.
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If Your Market’s Empty, There’s Probably a Reason
Consider the California Gold Rush. In 1848, carpenter James W. Marshall found gold flakes in a streambed while building a water-powered sawmill. He and the property owner John Sutter tried to keep the find a secret, but word leaked, and within a year, 80,000 people had flocked into the area from all over the country. Gold fever was catching, and by the Gold Rush’s height in 1852, some 300,000 people had braved disease, starvation, and Native American attacks to get their share of the riches.
If gold had no value, would those 300,000 people have risked their lives to find it? Of course not. The fact that so many came is a testament to just how valuable the prize they sought was.
In business, you want competition. Like the Gold Rush, the more value there is to chase, the more competitors you’ll find fighting for it. So if a business owner found themselves alone on the playing field, what would that tell him or her? It could be that they arrived first. But more often than not, it means that “there ain’t any gold in them thar hills.”
Competition validates your idea. It demonstrates that the opportunity you’re chasing is real, that there’s demand for what you’re doing, and that there are customers to be had.
COMPETITION MAKES YOU BETTER
This gets back to what we said earlier about complacency. Without competition, businesses have little reason to tweak the offerings to make them more appealing to consumers. But when competition is fierce, you have to innovate or die.
Competition forces businesses to improve their products, get more efficient with their processes, and contain their costs. The innovation that will boost your company to the top of the stack may be just around the corner, but without competition, you might never find it. Competition ensures that the companies involved are fighting for a finite number of customers, and to the victor goes the spoils.
Think of any game you’ve ever played, any sport you’ve participated in. Have any of them been devoid of competition? Were they a walk in the park without any challenge or struggle? The answer is almost certainly “no.” Competition and challenges are what make the game fun. They drive the players across the finish line. To be the best you can be, you need competition to force your hand.
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COMPETITORS HELP FOCUS YOUR MARKETING
Imagine you invented the burbler. You were the first to market, and so far no other firms have stepped into the fray. You know who has to let the entire world know what burblers are and why people need them? You. There’s no one to share the load. If you want to win customers, you have to do all the heavy lifting. Yes, you have the market to yourself, but it’s a HUGE market, and you may not have the resources required to reach everyone.
Now imagine ten other companies are also in the burbler business. While your potential market share shrinks, you now have help spreading the good word about burblers. Your competitors will help to educate your customers. Now you don’t have to make all of the introductions. You just need to demonstrate why your burblers are better than everyone else’s. This focuses your marketing efforts and makes them more efficient. Plus, everyone’s burblers will improve. Yours will get better, forcing your competitors to get better. Their success can drive your success. Competition ensures that you’re not alone.
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WHEN YOU’RE ALONE, YOU HAVE NO ONE TO LEARN FROM
You’re an entrepreneur, so you’re a visionary. But you’re just one perspective among many. Your competitors have different ways of seeing your industry, and each will have a novel take on your business. You can take advantage of this diversity and learn from it.
There’s likely some part of your business that needs improvement. Simultaneously, you probably have a competitor that’s already solved the problem. Examine their solution and learn how to apply it to your processes. Viewed properly, your competitors become a tool you can harness and learn from.
You can guarantee your competition will be doing the same thing to you. When you discover that a competitor is copying you, take it as a sign that you’re doing something right. They wouldn’t replicate systems that haven’t proven their worth.
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Businesses are experiments in commerce. You try things and focus on what works. The more competition you have, the grander the experiment becomes. Each competitor has their own Petri dishes where they’re developing and refining new models, working to improve on their results. If you’re paying attention, you can learn from all of them, saving yourself a considerable amount of effort.
At Simply Noted, we relish competition. We’re not the only company offering automated, handwritten cards to consumers and businesses. And because we’re not alone, we’re driven to be the best. That means we’re constantly working to refine our offerings, improve our customer service, and deliver more value. This is good for our customers, and what’s good for our customers is good for us. So don’t lament your competitors. Just get your head in the game and play!