Give your business every chance of success by refusing to face the competition head on. Instead, make the competition play your game.

A recent conversation with a local business owner reminded me of an article I read several years ago. The post, which highlighted how Amazon and eBay rule the roost when it comes to eCommerce, briefly detailed the author’s success in going head to head with the behemoths while he worked at an independent bookstore.

How’d he help the store remain successful in the face of such stiff competition?

  • Proprietary pricing
  • Proprietary selection
  • Proprietary experience
  • Proprietary merchandise

I’ve never worked at a retail outfit, but I can relate to his experience, having spent years consulting small and midsize businesses on product design, new product launches, and business strategy. One of the toughest sells was getting business owners to realize that playing the competition’s game was a fool’s errand, a point summed up nicely by the author of the blog post:

“You don’t need to have the market share of an Amazon to be a successful eCommerce retailer. But you need to learn to think like a grizzly, and own that part of the forest where the bear doesn’t even know what you’re up to.”

Make the competition play where they have a distinct disadvantage.

Adult grizzly bear

Too often, business owners debut new products with the “my product is better” mindset, foolishly thinking customers will reward them with business for a product or service that does not satisfy their needs to a greater degree than what’s offered by the competition. The other personality I encountered all too often was the owner who, because he had deep pockets and a strong team, figured he’d created the blockbuster product that would shake the market upon arrival.

“The market has never seen anything like this,” I’d hear often.

In time, I learned that working for owners in either of these camps would be a frustrating affair. At first, I could not understand why they didn’t get the folly of their thinking. Then it hit me: These owners only see what’s going on in the market and in their respective offices, workshops and labs.

They don’t see what’s happening in the thousands of other labs, workshops and garages around the country and, indeed, the world.

Why it’s unwise to face the competition head to head

I vividly remember being on the phone with one serial entrepreneur from Virginia, listening intently as he talked of the new product he’d developed.

“Let me snap a picture with my iPhone and send it to you,” he said.

Immediately, I saw a problem: I knew of at least three other companies creating near-exact replicas. (One of those companies was a consulting client.)

“It’s a solid offering,” I said. “It is different from what’s already available. However, what happens if your product shows up to market and there are a half-dozen new products just like it?”

He hemmed and hawed, before finally settling on “I’d really be surprised, because I don’t think anyone else has thought of this before.”

In business, however, what you don’t know can, will, and does hurt you. Because I had to sign non-disclosure agreements with many of the businesses I worked with, I was typically unable to share what competitors were doing, even if I knew it would impact what my clients were slated to bring to market. In time, I developed and shared a philosophy that served me and my clients well.

Information in business is asymmetric

It began with three simple sentences that were reinforced and nuanced over time:

  • Your product must be meaningfully different than the competition’s offering. Instead of hanging your hat on having the best product or service in the marketplace, highlight how it’s meaningfully different, and the benefits of it being so.
  • Choose to attack an area of the market that’s least feasible for the competition to move into. For example, if you serve a crowded market, a focus on creating on customer service or delivering a best-in-class customer experience can help set you apart from the pack.
  • Strive to own your area as opposed to focusing solely on being a first mover or fast follower. Not a week goes by that I don’t talk to a business owner and hear how crowded his or her market is. Carve out your spot by becoming known at the the “best for X,” doing one thing better than every other business.

Trust me, no CEO or marketing vice president wanted to hear such advice. They had cash and plenty of ideas. Being patient wasn’t in their cards. I showed them that doing what everyone else was doing—or trying to do better than what was already being done—played right into the hands of the competition.

In future posts, I’ll break down each of the three points above, providing examples of why they are effective and how you can make them work for your business. Keep the author’s advice handy: Facing the bear head-on is a recipe to get eaten.