“Ignore the competition.”
“Know your competition!”
“Outdo the competition.”
“Underdo the competition.” *
There’s a lot of talk about competition when it comes to startups.
And it’s all a lot to take in. It’s overwhelming – if you don’t believe me, try starting a company. Competition becomes real very quickly and the fear of competition (or more directly, the fear of failure at the benefit of someone outside of your control) has the potential to destroy even the most brilliant startups.
When I started Bandzu in early 2010 with Ian and Kevin, we knew we struck gold. The music industry was sexy and our product was going to revolutionize their convoluted and slapdash system. We were going to fix the lazy musicians! Power tools for the proactive ones! Yeah!
Until we found out that over fifteen companies were not only executing on the same idea, but their software was almost identical to our vision. Some had already been around for three years. One has pictures of their sweet warehouse loft office on their facebook.
Nooooooooooo!
Ian grabbed my shoulders and shook me. “Get a grip man! Competition doesn’t matter!”
“Yeah it does! They’ve got all the customers already!”
“WHO CARES? We can still build Bandzu to be awesome, and we know the competition doesn’t have everyone. People will use our product, and ours can still be better.”
“Yeah but–”
You get the idea. Ian eventually calmed me down, but this argument came up weekly. Sometimes it was reversed, but it always nagged at us. It ran us down and eventually made us apathetic about the whole company. Not even six months in we shelved the idea.
Bionic Hippo has competition too. There are some awesome design and dev agencies in Boston alone – people who do fantastic work and whom I respect very much for their accomplishments. Look beyond Beantown and there are thousands of people doing exactly what I’m doing. Many are probably even writing blog posts right now too.
Stay cool.
This is totally backwards. Bandzu had maybe 15 competitors we knew about. Bionic Hippo has hundreds – if not thousands – competing in the exact same niche of web / application design. You’d think I’d be a nervous wreck… but I’m not. I’m confident, aggressive, and cool. Bionic Hippo gets a lot of great projects, and we create great work without breaking a sweat (sometimes).
After Bandzu, I observed an interesting phenomenon. I am an iTunes addict – I buy my music, listen on my computer, and sync with my iPhone. It fits into my workflow and makes music management effortless. I started using Lala and Grooveshark to sample artists I didn’t want to commit $10 on iTunes to. I started buying songs on Amazon MP3 to save a few bucks. I snuck my way into Spotify and paid for a subscription. My obvious loyalty to one service was fragmenting due to the unique value props of each service. iTunes is extensive, Amazon is cheap, Grooveshark is easy. Google now has their Music Beta service, throwing their hat into possibly the most crowded consumer market of all time.
“What’s the point?” I thought to myself. iTunes is the de facto standard for music purchasing. They have the highest volume of sales and profit by an insane margin. Why would anyone enter a space dominated by the most powerful brand in the world?
iTunes wears the pants in the Music Industry. (Courtesy of The Oatmeal)
Grooveshark, for example, is a total underdog. Unlike their competitors, their entire business is music streaming, and they have the most to lose. Why does everyone talk about them? More importantly, why do people use Grooveshark?
It’s unique, it has a clear value prop over iTunes and Amazon, and it’s easy to use. Moreover it is different. In a good way. A way that, at times, makes Grooveshark more useful and better than iTunes.
My point…
I realized something interesting about competition that wasn’t apparent at the micro level my company was at. When you’re small, competition seems like an impassable barrier. Observing companies like Google, Amazon, Apple, and Microsoft battle over dominance in various markets (and most importantly, the small companies that squeeze in and manage to take a moderate chunk for themselves) shows that competition is okay. Chances are you won’t be the next Facebook, but maybe you’ll be the next Grooveshark. And that ‘aint a bad thing at all.
Competitors aside, Grooveshark is doing damn well and they have a great product. I’m certain that iTunes is a constant monkey on their backs, and they will never have the luxury of being complacent in their industry. They fight for every user by building the best music platform they can imagine… competition be damned. Their product is awesome because they have no choice but to be awesome.
These guys are proof positive that, even in the most competitive digital consumer market, competition can’t stop you from creating a great product.
My advice: Be mindful of competitors – find out what they’re doing right, how you can do better, and don’t let any of it cloud your vision and your goals.
One last thing to think about:
“Be afraid of our customers, because those are the folks who have the money. Our competitors are never going to send us money.” – Jeff Bezos, Amazon
* An excerpt from 37signals’ excellent book “Getting Real“. Read it all.
