There Is No Competition, Part One

I was reading Kawasaki's latest book (Reality Check, 2008) and he mentioned that a Partner at Sequoia Capital once told him that competition doesn't start until $100 million. Now Guy recognizes that those words were said in the dot com exuberance and have probably come down a bit since then, but I think - not so much. For the vast majority of companies worldwide, there simply is no such thing as competition. There are only quality products and companies and products and companies that suck.

I didn't used to think this way. I used to be worried about my "competitors". In previous companies I spent a great deal of time focused on what they were doing, figuring out how they were going to try and take my hard won customers and how I could be better than them. What complete foolishness. How much more successful I could have been back then if I never gave competing companies a second thought and instead poured my focus into making certain that my product was the absolute best, that it was priced perfectly, that my strategy was correctly targeted and that my marketing was concise and meaningful in its message. I humbly submit that if your business is not doing well it is because there is something wrong with the fundamentals. It has nothing to do with competition.

Which brings me to Patents...You may be thinking, "Well Colin, if there is no such thing as competition then why do so many companies apply for patents?" Great question. There are definitely situations where patent protection makes sense, but practically, do you really think you are going to sue a company for stealing "your" idea? Do you have any notion how long and how much money that takes? Rarely is a patent lawsuit even remotely a decent option. The best option is to outproduce, out market, out strategize and outsell EVERYONE else. Be first, be the fastest, be the best. There is no better way to insure your success than that. Also, there is a business misconception (lie) that lawyers and academics (i.e. those that have never started a business from scratch) would have you believe. The lie is that the hard part is coming up with the "brilliant" idea, when the truth is that the unbelievably hard part of starting a business is the implementation and successful execution of that idea. ANYONE who has done it will tell you that the hard part is making it happen. Great ideas are easy.

Make sure that your product and your company offer definable and meaningful value. That is hard enough as it is. Truly achieving meaningful market value is something that few accomplish and when they do it is beautiful and defends itself. Obviously, this brutal truth applies to my company (PromoPipeline.com) as well. If a competitor comes along and actually takes me out, then the cold hard truth is either that I never had a meaningful, defensible product to start with or I failed to innovate over time. Either way I lost sight of the fundamentals and deserved to die. It's business Darwinism.

To be clear, acknowledging that competition exists and bemoaning their effect on your business are two totally different things. The existence of competitive companies in your market is a great thing. In fact, no competitors is a major red flag that points to an insufficient market for your product. Competitors validate your reason for being. Beyond that, concentrate on what you can affect, keep the faith and don't give competition another thought.

Afterthought: I don't know when part two will be written. It surely will not be next. Many of you have given me a hard time about taking so long to write another blog entry. I appreciate your encouragement and the honor you pay me by reading my words.