Typically if you look at any of my past businesses, you’d quickly notice how much the project they run rely on innovation. Whether technical or market innovation, we’ve been first on the market. Firstly with Finance Manager (pl: Menedżer Finansów), launched in 1999, well ahead of avalanche of other desktop personal finance management applications. Secondly Spending Tracker (pl: Budżet Domowy), first on-line personal finance manager. Admittedly it has been hard at times, especially if you see a very similarly thought through implementation. Over time however one couldn’t notice the benefits of having a handful of competitors at any time of products being on the same market.
Competitors are growing your market
If your competition is in exactly the same business they’d typically spread word. It’s beneficial if you’re marketing a product innovation that has no perception like a washing powder. The harder obstacle on your way to success is to validate the product in eyes of your customers. You need to send the message across as the exact execution is not as important as the benefits of using your products. At this stage competition generally does a favour as it will help reaching out to many more customers with the message.
Validating your business idea
Secondly, you never want to be the best and the only on any market. If you think about it, being the only one is a very lonely place, but it also says something about depth of the market. Chances are, if you’re alone in it, you’re alone for a very good reason – it’s just might be that you haven’t thought your offering well enough to realise that there’s no market. Again, having competitors validates your business idea and proves that there must be more than just yourself seeing an opportunity to have.
Growing your own business
As much as any competitor would might eat a good part of your market, it also keeps you motivated. There’s nothing more poisoning to your business as being complacent. Having a competitor innovating along your shoulder generally helps. At Intelitech we tried to outnumber competitors with features and functionality of our product, at Zagozda however we do exactly opposite – making sure we do things much easier and simpler to use than the next guy. In either case we keep moving in right direction, sometimes incentivised, sometime pushed, but never standing still.
Creating investment opportunity
Lastly, but that’s not an apparent and immediate benefit, competitors might work just as potential business waiting for acquisition at a later stage. Acquisitions can be expensive, but at the same time minimise your risk of growing your business at an unpredictable scale and outcome.