Don’t Set the Table so Competitors can Come in and Eat Your Lunch - Keep Raising the Bar
The hyper-competitive world we now live in is full of fast followers. In our constantly-connected world of instantaneous information, every new business immediately spawns copy-cats, riffers, and discounters as well as cheap knock-offs and old-line traditional players trying to use their brands and their bigness to barge right into these new markets. Most of the low-end guys quickly learn to their dismay that no one wins the race to the bottom and that, in today’s economy, even “free” isn’t cheap enough in most cases because smart shoppers are increasingly jealous and careful with their time and their resources. Today’s consumer rallying cry could well be “give me something of real value or give me a break and get out of my face”.
Because the barriers to entry keep shrinking, it’s just as easy for the next 5 guys to start a business like yours as it was for you. In fact, in many cases, when you invent and establish a new product, service, sector or approach, you actually make it easier for the guys running right behind you to succeed.
First of all, they ride on your coattails, your PR and your advertising in every possible way to explain their business. They’re not pioneers breaking new ground; they’re not inventing anything; they’ve just learned to say “we’re just like X but cheaper or faster or closer”, etc. Saying “we’re just like Groupon but better” saves a shitload of time, money and marketing.
Second, they lean on your progress and success to establish their own credibility and to show their customers that the thing works and works well.
And third, they go to school on your errors and missteps so they save time and money by avoiding first-timer mistakes and by entering the product development and delivery cycle at a much more advanced and higher (as well as more stable) level than you did. The questions are so much easier when someone else has already worked out the right answers for you.
The fact is that while the barriers to real success are still just as high as ever, the barriers to effective competitive entry are almost non-existent. So what’s a hard-working CEO supposed to do?
The simple answer is that you need to do it to yourself and do it to your business before your competitors do it to you. And the only way to stay in the game and pull this off is to keep raising the bar every chance you get. The world is divided into targets and gunslingers and, if you can’t be a full-fledged gunslinger, then you’d better be a constantly moving target that’s always a few steps ahead of the competition.
The test is “what’s the best you can possibly be” and the answer is better (for the moment) than anyone else who’s trying to do the same thing. And just because no one else has done something yet doesn’t mean you shouldn’t be aiming for it – you can’t let other people’s limitations hold you back. It’s committing to a life of constant awareness (paranoia), continuous change and extreme flexibility as well as the willingness to eat and to abandon your “offspring” before they run out of steam. If you don’t, you can be sure someone else will do it for you.
A good example of a great marketing company falling asleep at the switch is Nike. Simply stated, Nike owned the athlete for years. The coolest shoes, the coolest endorsements, the best technology and the coolest TV ads. When the Web came along, they put up a pretty robust website and made sure to show off their ads and their products and then - having fallen in love with their own videos - they just sat there resting on their laurels.
But the competitive race never waits for you. And, almost immediately, smart, fast competitors figured out that the real athletes weren’t in it for the ads or the glory, they were in it for the blood, sweat and tears of the exercise and the sports. So a number of smart websites quickly emerged that served the real needs of the athletes – exercise programs, race training regimens, fitness tracking, socially connecting athletes with others who had like interests, athlete and team meet-ups, etc. – all aimed at providing real services and benefits to the athletes – not simply talking about it or trying to push products down their throats. But you can’t win a race with your mouth.
And, in pretty short order, the real athletes (and plenty of weekend warriors as well) totally bailed on the Nike ad sites and moved over in the millions to these other service sites which were far more connected to their interests and far better uses of their scarce time. Nike blew it by not understanding that the expectations of customers are progressive – yesterday’s novelties are today’s old news. Nike failed to change their web offerings to meet the new needs and demands of their core customers and – as a result – opened the door for small, quick competitors to jump into the space with simple, straightforward tools and applications for runners and other athletes that permitted them to eat Nike’s lunch.
Raising the bar means that you need to constantly outmode yourself and regularly cannibalize your products and services. It’s not a linear or even an evolutionary process – it’s utterly discontinuous and the fact is that what you’re doing today may be meaningless tomorrow because the available technology takes a quantum leap and leaves your offerings in the dirt. The real test of Apple’s relatively new CEO will be whether we see an iPhone 4S, iPhone 4X and an iPhone 4Z or we see a jump to the iPhone 5 that once again revolutionizes the marketplace.
The rate of change today is autocatalytic – each change creates the next change at a faster rate and leads to disruption and radical obsolescence – all driven by virality and almost perfect cross-market intelligence. If you want to stay in the game and run with the big dogs, keep raising the bar.
PP: “You Get What You Work for, Not What You Wish for”
