Why Competition Is Good for your startup14 Jan 2016
Competition drives businesses. Without competition, businesses will not grow or innovate. Your competition may be huge MNCs or other startups, but competition is essentially what drives you to do better. Here’s why competition is good for your startup:
Competition spurs improvement
Competition inspires businesses to improve themselves. Competing amongst each other is great initiative for each other to do better and stand out from the rest.
Competition provides a yardstick
Competition can be a measurement tool, and you will see clearly who is leading and who is not. There are many different metrics that allow businesses to compare themselves to others in the field. For you to constantly be relevant you will have to measure yourself against your competition and see what you’re doing right or wrong. Research their business model, their marketing channels, and their core customers. What can you provide the customers that they can’t?
Competition makes you learn
Competing in a crowded marketplace, you can learn from your competitors’ mistakes. Adapt what you learn to your business so that you can save time and money.
Competition encourages innovation
A startup that is disrupting the market forces other business to innovate. Businesses that cannot adapt and innovate to keep up with the changing trends ultimately lose in the market. For example, uber dominates the cab aggregation market.
Competition helps you validate your idea. Anything that can be done already has some sort of company doing it. The more the competition, the more the opportunity.
Keeping you on your game.
A competitive market is what drives capitalism. Competition drives startups to be the best that you can be. It takes you out of our comfort zone and forces you to create better products and services. If you do not continue to make things better, you are not innovating. The failure to innovate leads to obsolescence. You should be constantly on the lookout to better your products or services.
Example: Dropbox’s Drew Houston knew that cloud service providers like BOX existed and already had huge traction in that market. Google also announced its cloud services. Yet, he still had a vision of making cloud services simple and easy for everyone. He created DropBox and his personal net worth is now estimated at $1.2 billion.
In conclusion, it is necessary to embrace competitors. Competition keeps you on your toes. Competition is not necessarily a bad thing: competition has driven many startups to become better. Many businesses get jaded, comfortable with the status quo, thinking it impossible to innovate. Competition forces you to innovate and thus stay ahead of the competition.