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An informal, stream-of-consciousness reflection on business ideas, events and issues in modern business, modern life and with some specifics to the web-software industry by Paul Tomori, Internet Entrepreneur

Question: How do you deal with competition?
By Paul Tomori
Friday, June 12, 2009 at 17:12:46 (EDT)

Answer: We don't deal with competition. We deal with customers.

Question: No, I mean, what do you think of the competition?

Answer: We don't think of the competition.

Alright... so I jest slightly. It's been a crazy 15 year ride for me so far in the internet business. The original challenge was not so much in getting people to choose my company, but to understand why they even needed a website... Can you imagine? In those early days, though, enough businesses knew they had to be on the net that we had no problem in gaining customers. In fact, getting a new account was like plucking ripe fruit hanging low on the vine.

And then something happened.

Everybody and their brother hopped on for the ride and now the cherry-picking is not so ummm... fruitful. In fact, we occasionally find ourselves clambering out on a limb with competitors in tow as we all seek the same coveted customers.

It can sometimes get messy.

Most of the time, the competition plays fair, but we have seen instances where colleagues who we thought were old friends have beaten up on us a little to get an account. We even saw one opponent try with questionable tactics to block us completely from entering and expanding into a market which had all but been locked up. I am happy to say that we were not dissuaded!

And occasionally, I have found myself reacting overzealously toward the competition in times where our base was threatened. Happily, we are much more calm these days. I attribute this to a set of rules that have evolved for us as a company and me personally over the last 10 years.

1. YOU set the agenda
First and foremost, you can't let what the competition does set your agenda. A leader is simply too busy setting and fulfilling his/her own agenda to be reactionary to what the other guys are doing. If you simply wait for the competition to keep making their moves, before you make your own, then you are nothing but a follower. Truly, it is not strategic to merely wait and react, unless your strategy is to end up on the sidelines.

2. Never slag the competition in order to make your own company look better.
Doing so only makes you look disingenuous to everyone. No worthy customer will ever choose you, because you slagged someone else. They will choose you on your merits or they will not choose you. Simple as that.

3. Don't be a pushover.
If you believe that someone is using unfair tactics against you to win customers or to block your entry into lucrative markets, fight back hard. You know what a pin cushion is right? Don't be one.

4. Never sweat the loss of a customer (at least not profusely).
Obviously, you have to be concerned whenever a customer chooses the other guys over your company, but don't beat yourself up over it. Do NOT dwell on it. The corollary to this is... Do not gloat when YOU win an important customer. You're going to win some and you're going to lose some. Never ever ever ever ever let an emotional response cloud your vision, because remember you have an agenda to fulfill and it's awful hard to do that when you are caught up in the latest loss... or the latest win.

5. Befriend the competition.
Seriously, it may serve your best interests one day. Even your most ardent competitor may be the exact person you need to call on one day to combine forces against a foe that is bigger than both of you. Fight hard against the competition, but save some room for possible affinities.

6. Never compete too hard with the guys next door.
If you get all caught up in the local game and start to perceive your local competition as the be all and end all, then you are setting yourself up for many missed opportunities. Such competitiveness almost always becomes "personal" and downright cheesey. Don't embarass yourself by locking antlers with the local schmokels whether they are better or worse than you at what they do. If you aspire to greatness, you will have to look far outside the invisible local walls. The question is... do you want to be "world-class" or "local-class"? There is no room for bush-league in-fighting when there is truly a higher calling. Look wide. Look ahead. Look past the local competition.

7. Take sidelong glances.
Sam Walton, founder of Wal-Mart was shameless in his analysis of the competition. He would literally walk into any retail store with notepad in hand or voice-recorder and he would record all the observations that he could, good or bad. This helped him to get inspiration about best practises in order to keep improving his own operation. He would go into any retail operation big or small. He gleaned a thousand best practices from hundreds of competitors. In the music business, the worst thing you can do is to have a single musical hero. You'll end up sounding just like him! Flaws and all. Same goes for business.... Just don't do it obsessively. Use the sidelong glance to see what your competition is doing, then return to point one above... and set your own agenda.

When it's all said and done, remember one very important thing. Competition is not a bad thing. It is a cornerstone of our democratic, capitalistic society. It is one of the key motivators for progress that has given us all a better standard of living. All the boats rise when the tide comes in. Remember that. Competition forces you to outdo yourself and to stay alert and ahead of the curve. It keeps you on your toes. Welcome that... thrive because of that.

Here's a tip of the glass to my competition. I am forged and/or inspired at least in part by your progress. Game on.

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