The Hidden Benefits of Competition

The competitor to be feared is one who never bothers about you at all but goes on making his own business better all the time. – Henry Ford, founder of the Ford motor company and assembly-line pioneer,

One of the most common experiences of a first-time entrepreneur is discovering that your brilliant business idea is not as original as you would think: other businesses are already offering similar products or services. This would shake anyone’s confidence – after all, why bother when someone else is doing what you want to do?

Cheer up: there is The Hidden Benefits of Competition. When any two markets are equally attractive in other respects, you are better off choosing to enter the one with competition. Here is why: it means you know from the start there is a market of paying customers for this idea, eliminating your most significant risk.

The existence of a market means you are already on the right side of the Iron Law of the Market,  so you can spend more time developing your best offer instead of proving a market exists. If there are several successful businesses serving a market, you do not have to worry so much about investing in a dead end, since you already know that people are buying.

The best way to observe what your potential competitors are doing is to become a customer. Buy as much as you can of what they offer. Watching your competition from the inside can teach you an enormous amount about the market: what value the competitor provides, how they attract attention, what they charge, how they close sales, how they make customers happy, how they deal with issues, and what needs they are not yet serving.

As a paying customer, you get to observe what works and what does not before you commit to a particular strategy. Learn everything you can from your competition, and then create something even more valuable.

This concept by author: http://book.personalmba.com/hidden-benefit-of-competition/