How to Cheer on Your Competitors While Aiming to Win

3 min read · 6 years ago


Many entrepreneurs assume that a startup’s competition is its primary threat. In reality, having no competitors can be far more dangerous. Without opponents that offer options in your category, you take on the complete burden of market formation. Succeeding under those circumstance hinges on three key elements: prospective customers who recognize the problem you address, understand your solution and want to solve that problem with your offering.

In a competitive market, your rivals’ marketing dollars work alongside your own to educate prospective buyers on each of these elements, helping you both succeed.  

Still not convinced? Here are three reasons why you should be root for your rivals’ success.

Related: The Greatest Competitive Advantage Is How Hard You Work Before the Game Begins

Customer apathy

The solution to advancing market formation is building awareness through customer education: using marketing and sales to hammer home the problem, the solution and its urgency. Unfortunately, these efforts can be wildly expensive, and they can’t guarantee you a customer. Once you’ve established conviction in a customer’s mind, his or her desire to compare alternatives is instinctual.

The gain you get by working with your competitors to drive down the cost of education far outstrips the difficulties of having to compete in actual (vs. hypothetical) deals.

Related: 4 Signs Your Team Has What It Takes to Compete

Customer risk tolerance

Most mainstream customers are risk-averse. Proposing a new concept to their peers risks their reputation, or, in some cases, their employer’s energy and money.

Your competition helps you by making these risks feel manageable. Embracing a new concept is a much riskier undertaking than signing with a new vendor. When customers can see multiple players in a space that’s been validated by third parties, they know they aren’t getting into business with an inexperienced vendor that’s trying to pioneer some wiz-bang widget. By participating in market formation, your competitors help ease customers into taking the risk of investing in your business.

Misunderstanding what the customer needs to hear or see 

As a startup, every decision you make should take into account whether it will help your business reach and serve the right customers. Your competitors are one of your best resources for these conversations; they show you where you’re weak and need to be stronger and inspire your team to stand out on all aspects of execution.

Another mistake competitors help your business avoid is over-differentiating your message. What if Google didn’t want to be a “search engine” because there were already a bunch of those, and instead called its service “web organization?” How would customers explain it to each other and create a viral adoption effect?

Maintaining an echo of related but differentiated messaging defines your industry, allows third-party influencers, such as analysts, to coin terms and offer commentary and arms customers with a shorthand understanding of your value and how it will serve their own needs. 

In the early days of market formation, it’s unlikely that you or your competitors can reach all prospective customers – the costs of sales and marketing are simply too high. While you’ll never bear hug your competition and more days than not you’ll curse them, don’t lose perspective of the important role they play in building your business. By welcoming this value, you can focus your energy where it really matters: on your customers.

Many times, direct competitors won’t even pose a long-term threat. Market forces naturally push you and your competitors to different corners of the industry. As you each develop solutions to meet customers’ needs, you’ll find less overlap among your prospective base. It’s only when you and your competition both have massively large businesses that you start to cannibalize each other materially.

As a startup, you contribute to your own success as you cheer on your competition, and you address your real enemies: customer apathy, customer risk tolerance and team focus. 

Related: Why I Stopped Saying, ‘I’m Not a Competitive Person’

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