You’re growing so fast, you don’t even have a minute to think about competition. Competition doesn’t matter.
- Jason Lemkin, Managing Director of Storm Ventures
To say that the B2B startup world is competitive is a bit of an understatement.
New companies are founded every minute, and while some startups succeed fast, most fail faster. In such an insanely competitive market, it’s all too easy to get sucked into tracking the funding rounds, press coverage, and growth trajectories of your biggest competitors. However, this obsessive tracking isn’t doing your business any good.
Every minute you spend analyzing the competition is a minute you’re not focused on your own company’s growth. If you want to build a successful startup company, don’t waste another minute thinking about the competition.
The Competition Conundrum
It seems completely counterintuitive to ignore the competition when the market is so competitive.
Don’t you need to know what the competition is doing so you can outsell them?
Won’t you be blindsided when they come out with a new product?
Won’t your business fall behind?
Don’t panic! We’re not advising that you completely ignore the competition, especially not your sales team. Sales reps should know exactly how your product’s capabilities stack up against your biggest competitors. Build out a competitive comparison guide that tells reps how to position your product when you’re in direct competition for a deal. However, once you’ve got your competitive comparison done, don’t give another thought to the competition. They are merely a distraction from what should be your #1 focus – building the best business possible.
Build a Better Product
It’s easy to tell yourself that you need to know what the competition is up to in order to stay ahead of the game. If another company is launching a new and exciting feature, you may feel like you have to rush to offer that same feature. However, playing catch up is not going to keep your business on top.
Startups have to come up with their own brilliant ideas, not simply copy what others are doing and attempt to do it better. If your company spends too much time copying the competition’s product, you’ll never build anything great yourself. Original thinking is incredibly valuable, and doesn’t come by stealing anyone else’s ideas. The best and most successful startups build a product that everyone else imitates.
Focus on Your Customers
You’re not building a product for the competition or even for your investors — you’re building a product that serves your growing base of customers. It doesn’t matter if a competitor is offering a flashy new feature, unless your customers are clamoring for that exact feature as well. It’s easy to get caught up in the thrill of competition and divert from your original plans if you’re too focused on what everyone else is doing.
Instead of rushing to alter your business strategy with every shift in the market, talk to your customers. Find out their specific pain points, what they use most in the product, and how they’d like to see your product change in the future. This feedback is infinitely more valuable to your business than any competitive comparison. It tells you how people are actually using your product and can inform not only your product development, but also your sales and marketing efforts.
Find Your Ideal Market
Who the competition sells their product to doesn’t matter. While you’re tracking their new marketing campaign, you never know how successful it really is. They could be targeting the wrong demographic, marketing to the wrong audience or offering the wrong price point to new customers. You can’t assume that another company knows what they’re doing! You can only rely on your own decision-making skills and your own data analysis.
Do your due diligence and keep refining your product-market fit. If you’ve analyzed the data and have found that your target market is small and medium high-tech businesses, then go after those companies aggressively. Let your competition chase after massive contracts in the Fortune 1000, and don’t worry about it. You need to succeed in your own space, and find the niche that works best for your company and your product. If the data backs up your decision-making and your revenues grow quickly, you’ve found the market that works best for your business.
If you’re really serious about building a successful startup, you should be focused inward, not outward. Build a great product, focus on your customers, and ignore the competition completely. Let them worry about you.
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