Your Competitors Don’t Need to Beat You to Win
Most of the time, they just need to make sure you lose.
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Almost all companies compete with a larger company of some sort. That’s good! If you have large competitors you are targeting a big problem in a big market.
Just because your competitors are bigger doesn’t mean you can’t win! There are a lot of things smaller companies can do better than large companies:
Improve your product faster.
Offer different pricing models.
Give each customer more attention.
Of course, large companies have a lot of advantages of their own. To beat them, small companies need to use their advantages well and attack the weaknesses of the larger companies. Clayton Christensen’s The Innovator’s Dilemma laid out this dynamic very well, and provided an important model about how disruption happens.
However, it’s important to remember that large companies do not have to beat you to win. Their most important advantage, one that is very hard to overcome, is that they can wait.
Small companies have fewer resources, and that includes money. Money is time in business, which means small companies have less time. Small companies need to move fast, grow and do so continuously until they can become big companies too.
Large companies have reliable cashflows, established customers and they don’t need to move fast or grow. If they succeed in slowing down smaller competitors, they can just wait for the smaller companies to fail.
This is easier for them to do than it would seem. Your product might be better, but the larger company doesn’t need to compete on product features. They can simply confuse the market so that customers never even hear about or try your product. For example, larger companies might:
Claim that your best features are on their roadmap, “coming soon”. Even if it’s a lie, it means customers might wait instead of buying your product which slows you down.
Claim their product does the things your product does. Even if it’s a lie, the customers might get confused and in doing so fail to even try your product.
Roll out bad versions of your best features and claim that they are equivalent. Their bad version can poison potential customers against you, since they will say “oh, we already tried that and it didn’t work”.
I’ve had all of these tactics used against me, and they are effective. One of our larger competitors trained their sales team to claim their product did all the same things our product did. It was untrue, but their sales people would waste hours of a customer’s time trying to convince them. All of those meetings slowed down our own sales process and made it hard to get the attention of those customers.
In the end, it is often cheaper for a large company to slow down smaller competitors than to actually compete on value. The smaller the company the easier it is to use this stalling tactic, as smaller companies have less time.
So, if you’re the smaller competitor what do you do? Realize when your larger competitors are using this tactic! Once you realize they are just stalling instead of competing with you, you can use it against them.
When that larger competitor’s sales teams would try to convince their customers that they did what we did, we started offering risk-free trials. We made it so easy for them to try that they did, and they could see for themselves that the larger company was lying. That destroyed the customer’s trust in them and made it easier for us to win the deal.
Don’t let them cloud the waters and wait for you to fail. Take the fight to them, and call their bluff. If you do, then they lose one of their most important weapons.
And, even better, they need to worry about competing with you!
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