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Deep down, every entrepreneur fears competition. After all, building a business is a deeply personal endeavour, and the very thought of having someone else try to play in your sandbox can elicit feelings of anxiety and defensiveness. The absence of competition in any given market segment is often viewed as a positive by entrepreneurs, providing them with a clear and straightforward path to success.
This belief, however, is as damaging as it is misguided. Entrepreneurs who don’t have competition should be wary. Rather than being a strength, a lack of competition in your market can be indicative of a serious weakness. I should know: My business lacked competition for years, and it was a major problem. Looking back, I’m embarrassed by how I gleefully proclaimed our lack of competition to potential partners and investors. What I didn’t realize at the time was that there are only a handful of reasons as to why a business might not have competition, and none of them are good.
The first reason why a business might not see competition is an overly-narrow definition of the target market. When you’re building a product, it can be easy to become so engrossed in the details that you lose sight of the big picture. Put another way, while there might not be another solution in the market that does exactly what you do, there may be other players who are close enough that your prospective clients can’t tell the difference.
I fell victim to this myself during my first year in business. I saw BodeTree as such a unique and targeted product that I convinced myself that we had little to no competition. After all, no other player in the market did exactly the same thing we were doing. I had a very narrow view of what constituted competition, and thus failed to see the forest from the trees. In reality, our potential customers weren’t looking for specifically what we offered. Instead, they were looking for broad solutions for the pain they were experiencing in their business. This meant that we were not only competing against other web applications, but things as diverse as bookkeepers, accounting platforms, and spreadsheets.
It was only after we expanded our view of what constituted competition that we truly began to understand the market we served. This realization helped us better connect with our customers, refine our messaging, and explain why our solution was superior.
The second reason why your business might not have any competition is that you’re simply ahead of the market. Of all the reasons, this is by far the least problematic. After all, you could simply be solving a major pain point for your customers in a new and innovative way. However, if that is the case, you have to be aware of the challenges that go along with being an innovator.
Contrary to what we would like to believe, many of us don’t embrace change with open arms. As a result, it can be difficult for innovative companies to thrive when carving out an entirely new segment. This was the second issue I encountered at BodeTree. When we first launched our BodeTree Platform product aimed at banks and other financial institutions, we found that we were about 18 months ahead of the market.
Many of the banks and other institutions we were trying to serve simply weren’t prepared for our solution. BodeTree didn’t fit into the standard set of solutions with which they were familiar, and thus the sales process was incredibly challenging. To solve for this, we embarked on a massive campaign to educate our clients about the problem we were solving. In time, the market began to recognize the need for our solution and competition began to appear. We were able to use this educational period to establish ourselves as thought leaders early on, and developed an “awareness advantage” that remains even though we now have increased competition.
The third and final reason for a lack of competition is the hardest for entrepreneurs to accept: people simply don’t want your product. This difficult possibility is something that we all have to be open to, as painful as it could be.
Grappling with the possibility that people may not want your product or solution requires a healthy dose of humility and self-awareness. In order to create something from scratch, entrepreneurs have to be both intellectually and emotionally invested. However, this deep, personal investment can often blind people to the facts. I’ll be the first to admit that the first iteration of BodeTree wasn’t a success. At the time, the market we served was so small that it was nearly impossible for us to gain critical mass. Fortunately, we recognized that the people we were selling to didn’t want the product we had, and we were able to pivot quickly and successfully.
Make no mistake: a lack of competition for your product or service is a weakness, not a strength. It means that you’re in for a tough start. The key is to remain open-minded, self-aware, and mindful of the challenges you’re going to encounter. Remember that competition is validation for your product or service, and that should be celebrated rather than dreaded.
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