I love the energy that competition generates.
To some, this energy is pure angst after they (finally) realise they are not alone in their chosen market.
And to others, it’s a sign of validation that a market actually exists.
Ultimately competition always results in better products and services being created over time.
There’s just one problem.
And it’s a human one that dates back to many of our childhoods when we were pitted off again other children in a sporting race.
This is often our earliest exposure to the term ‘competition’. It’s at these events where, as much as parents try to keep their emotions under control, they start yelling and screaming in support of their son or daughter.
In response, and in a blink of an eye, children recognise that all effort in that moment needs to be concentrated and expended on trying to win. This is the beginning of a feedback loop. And from here attitudes to competition evolve and oscillate along a spectrum as we get older.
A healthy respect and good humour for those who offer us a challenge lives at one end of the spectrum. Ego is tempered by the good humour and the admiration for the spirit of competition reminds us that people exert effort in pursuit of improving something bigger than themselves.
At the other end of the spectrum is a philosophy of winner-takes-all-at-any-cost. Not be mistaken as ‘mission-focused’, those who consistently operate here either ignore their competition. They believe they are superior or focus on eliminating their competition to become the dominant market player.
Ego is more difficult to temper in this environment and it can lead to a loss of market awareness and this is a cultural slippery slope.
There are 4 reasons why you should always respect your competition.
1. Their founders have dedicated their lives to solving problems
They are obsessed with solving the same problem(s) you are. That means they’re always thinking, always experimenting and always learning. You know what is sacrificed to walk this path. Respect it. They might just outsmart you.
2. You don’t know what they’re building
The reality is that there is no way for you to know, and it might be better than what you’re building. Don’t get me wrong, I’m not suggesting you obsess about what your competition is up to. I am saying that completely discounting what a competitor is capable of creating is a mistake. They may surprise you and if (and when) they do, you may not be organised to respond and that can be fatal.
3. You might end up being forced to work together
Businesses are often required to work for the same customer as a way for large companies to mitigate supplier risk.
If your business is forced to collaborate with a competitor and either of the businesses have developed a culture devoid of respect for competition, it’s going to be a rocky ride. The obvious worst case scenario is that the customer fires both businesses due to lack of performance and everyone loses.
4. They might want to buy you or vice versa
Contrary to popular belief it’s not uncommon for founders of competing businesses to meet periodically. These conversations usually focus on strategic industry-related issues and opportunities but they can also lead to merger discussions.
The only time mergers create value is when the teams of two businesses are genuinely excited by what can be achieved by joining forces. Value is rapidly destroyed when one of the businesses considers the other the enemy. And it’s also no surprise that adversarial cultures are born from spending too much time at the winner-takes-all-at-any-cost end of the competition spectrum.
Disruptors live across the competition spectrum. I like to believe people live somewhere in the middle, venturing from one side of the spectrum to the other as they need to. But remember, left unchecked ego and competition are a dangerous mix. Don’t trash your competition. It’s not worth it.
Just be aware of their presence and keep moving towards your vision.