One of the things you should absolutely never fear along the entrepreneurial road is competition. It’s one of the best things that can happen to you.
In his book, Civilization: the West and the Rest (2011 Penguin Books) Harvard history professor, and Senior Fellow at the Hoover Institution, Niall Ferguson argued the reason the pitiably small nation states of the West rose to global domination against the huge empires of China and the Islamic Ottoman Empire was because of six “killer apps” as he calls them which developed in the West. The first among them is competition.
In their heydays, each of these empires had introduced breakthrough scientific advances. The Chinese had gunpowder and movable type printing long before the West figured out either one of them. Guttenberg and his press were late-comers to the printing game. Muslims advanced in many fields, mathematics being one of them—they created the concept of zero, and developed algebra. And yet by the 1500s, these two huge empires had become so vast, and so highly controlled that competition just didn’t exist. And progress had stalled.
The tiny nation states of Europe, with their borders banging up against each other however were always competing with each other: They wanted more land; they fought constantly with each other, among other things. And because of that competition, they developed smaller and faster ships that could go faster and outmaneuver the huge Chinese junks.
It’s the same principle that will help you build and grow your business. Competition isn’t a bad thing; it’s a very good and healthy thing, in fact, whether that competition be external or internal.
Monopolies rarely help anyone
There is a saying in business that you do your best business on Main Street; the same place where all your competitors are.
When you’re the only game in town, there’s no reason to think of customer satisfaction, employee satisfaction or even really improving your product. After all, if you’re the only one offering a certain product or service why should you work to make it better, or less expensive?
Back in the bad ol’ days there was only one telephone company in America—AT&T. And they were notoriously slow in responding to service calls, and the rates just kept going up. When you moved into a new house, you had to block out an entire day to get your phone service turned on because you never knew exactly when they were going to arrive to get you set up.
To say nothing of yellow page advertising. If you wanted your business in the phone book, you had no other choice. When you saw your sale rep each year, the conversation went something this, “Nice to see you, how’s business going? Great glad to hear it. Same ad package as last year? The rates have gone up 10%. Sign here and press hard, there are three copies.”
With the court-ordered break-up of AT&T in 1982, things changed. New “Baby Bells” (usually regional carriers) sprouted across the land. New carriers such as MCI and Sprint came along. Rates went down with choice and service options increased. That meant new yellow pages publishers as well.
Years ago in a Salt Lake City bar, two guys were shooting pool one Friday night. Dave was the assistant sales manager for the new yellow page publisher in town. As they played Dave asked his new friend what he did for a living and the man said, “I’m in the same business as you. I sell yellow page advertising for US West.”
Dave asked, “So what do you think of us?”
The answer came, “You make me a better salesman. Now that I have someone here competing with me, I can no longer just tell my clients, the rates have gone up by ten percent. Now I have to give them reasons to stay with us. I’m glad you’re here. I love the competition.”
Healthy Competition Makes Everything Better
We’ve touched on two of the main benefits of competition—better prices and better customer service—not to mention more selection—but there are many others.
Some of the more important other advantages are learning from your competition. There is always something new you can learn to improve your business, and if someone is doing it better, then learn from it and improve on it.
Competition can lead to improved standards for your industry, as people join together to make sure things are done properly and their industry is protected.
It leads to innovation. Remember, almost all patents these days are improvements or variations on already existing products and ideas. They haven’t built a new wheel in millennia, but they have improved on wheels a lot since the first one came along.
It allows you to serve your customers and clients better. There are times when you won’t have the product, service, information the client needs. Competition allows you to serve them by knowing who exactly can help them.
Competition forces you to work smarter, trying to find ways to improve your product and adapt to an ever-changing marketplace.
Pete Carroll, former football coach at USC and currently coaching the Seattle Seahawks, has the philosophy of “Always Compete”. This isn’t just competing on the field, but of always trying to be your best, against the other guy, but being the best against your own self and your own capabilities.
Competition is one of the best friends you’ll ever have in business.Business & Finance Articles on Business 2 Community