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Written By:Ken Mocabee
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Manifesting Your Startup - Part 2 - Dealing with Competition

Startup team having a group meeting in a modern office with large windows and hanging lights.

In my previous post in our Manifesting Your Startup series, I talked about the importance of doing your homework. One of the things we touched on was competition, and why it's always a factor, even if you have a unique product idea.

In this post I'm going to dig into why competition isn't always a bad thing, how to manage it, and how to succeed in the face of a seemingly overwhelming competitive landscape.

Why Established Companies Don't Innovate

Innovation is a tricky thing for established companies which presents both risks and rewards. While it might seem obvious that companies need to innovate, that isn't always the case, and the risks sometimes outweigh the potential rewards.

Companies with mature customer bases often look at innovation as something that they would like to do but are often very reluctant to do so for a variety of reasons and we'll dig into those a bit.


Market Cannibalization

Market cannibalization occurs when a company creates a new product that has appeal to their current customers, siphoning off them instead of expanding their market. This can lead to a direct loss in revenue and often market share. The fear of this often causes leadership to stall out innovation initiatives or do it so slowly that by the time the react to new market forces, it's too late.



When there is a big dog in a market that has an entrenched user base, any tinkering with features or interface results in a flood of support tickets and unhappy customers. Leadership gets gun shy with any innovation at all and falls back lazily on “If it ain't broke, don't fix it”.


No Sense of Urgency

Established companies often lack a sense of urgency when it comes to innovation because the believe their customers are loyal. And besides, they know what they want, right? They became successful because they filled an unmet need, or addresses a pain point in their industry, and they think that's enough.

While loyal customers are great, you have to earn that daily, and when companies fail to innovate, they leave themselves exposed to a lean and mean startup coming in and offering something better.


Lack of Leadership Buy-In

Often established companies will have people sounding the alarm bells and proposing innovation initiatives that fall on deaf ears with their leadership. Unfortunately, leadership often lacks the vision for what their products could and should be and are focused only on the now instead of the future.


Innovation is Risky

Often the risk is perceived as too high to take to embark on changing a product that is currently successful. A failed product launch, no matter how innovative it might be, is something that no CEO wants to have to defend to their board.


Innovation is Costly

Even when buy-in is there, bean counting often overrides innovation initiatives. They know they need to do it but committing resources for R&D is costly and treacherous to the bottom line.

How Startups Can Compete and Win


Startups have advantages and opportunities that the big companies often do not. You are starting with a blank canvas, and that freedom gives you power.


Know Your Competitors

To be successful in a mature market, a startup needs to fully understand the competitive landscape. Some of the best product are created by those in an industry that see that the needs are not being met in key areas and fill those needs. Talk to your customers, and find out their problems and pain points, and create product ideas that address them.


Find a Niche

Big, entrenched companies with mature products often have layered on feature after feature over the years, creating bloated products that do a lot of things OK, but nothing really great. Finding a niche that allows you to serve a specific need or pain point that isn't being served by the big dogs is a great strategy. It gets you in the market, and you can sometimes fly under the radar.

However, if something seems like an obvious niche, and no one is serving it, there might not be the opportunity you might think. This is where Design Thinking principles can help through empathy for the customer.


Innovate Continuously

Small, nimble startups have the freedom to constantly innovate, and often their users are all-in on the innovation process. By giving your customers a window into your innovation process, they'll feel like their part of your team - because the are!


Tell Great Stories

Stodgy big companies often are terrible at communications and PR. They often fall flat when talking to their customers and positioning themselves in their market.

Great storytelling is not just about what you are doing, but why you are doing it. This is your chance to really connect with your customers by talking about what motivates you, how you bring value, and the reason you do what you do.


Offer Value, Not Price

Startups often think that if they can create a good product that has a lower price point, that is competitive advantage. At a certain level, that's true - lower pricing can be appealing. But selling on price alone is a long-term losing proposition. The customers that switch because of price will not be loyal, and you are vulnerable to a competitor undercutting your price.

Instead, offer great value. Do more, go farther. Respond to your customers needs and wants. Give them a million reasons to stay with you, even if someone offers something cheaper.

Competitive Risks

Sometimes the competition really is too great to jump into a market. Sometimes the big dog is big because they do everything awesomely, are terrific innovators, have great customer service, and offer amazing value. You must weigh those risks and opportunities, and if you can't find a niche or an unmet need you can exploit, it might be too overwhelming to tackle.

New Competitors

Startups that get traction often attract new competitors, and they should be prepared to address those. Startups that have great customer service and user experiences, innovate continually, and have outstanding value can resist those competitive pressures. But never forget that the disruption you create, others can as well.

As startups get traction, grow their user bases and have established products and services, they are at risk of becoming the new “big dog”, and can fall into the same traps I've outlined. Instead, innovate continuously and never become complacent with your customers.


Competition isn't always a bad thing, and it keeps us on our toes. And the big dogs can be lazy and stuck in a rut, which presents huge opportunities for startups to disrupt their industries. But do your homework, look for pain points and unmet needs, and if you do that, you'll have a good chance at success.

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