Three lessons about the competition
Know your competitor to beat your competitor. From Claudio Gennari.
This post is part of a series celebrating SmartSign’s 15th Anniversary. In 15 posts, we reflect on lessons learned, good experiences, and company-wide changes that brought us to this milestone of success. You can view the entire series here.
Starting a successful business doesn’t happen in a vacuum. The biggest thing that’s going to keep you awake will be “the other guy,” both your existing competition and the young upstarts that come in swinging once you’re an established brand. After 15 years as an e-commerce company, SmartSign has learned a few major lessons about knowing your competition, and what to do with that knowledge.
1. Do your research before getting into the ring…
Every MBA program worth its salt will explain to eager young business execs that competitive intelligence is the first stop on a roadmap to entrepreneurship. Competitive intelligence means doing granular, in-depth, and ongoing research on your would-be closest competitors and making sure that there’s space in the arena for what you’re hoping to build. Market research and competitive intelligence aren’t just during the seed and launch phases, either, but should be healthy and supported initiatives throughout the life cycle of your company.
You should know their “faces”, that is, the way they present their brand and their company (both real world and digital). Find out what their values are, how their employees feel about their company, and how they’re perceived by their customers. It’s also critical to know the vertical you share with your competitors, or you could give them a knifes-edge advantage on trends. If you’re both in tractor sales, this means knowing everything there is to know about farming, mechanics, and the agriculture business. Attend trade shows and conferences, join the professional organizations that are relevant to your industry, and make sure you know the product or service you’re offering like the back of your hand.
2. …but don’t aim right at Goliath
Every fresh-faced startup wants to become the next Apple, but our years of experience as an e-commerce retailer has taught us to know our parameters and succeed within them. Of course you know who the 500-pound gorilla in your vertical is, but sometimes it’s better to forgive yourself in advance for not taking a swing at him, instead focusing on besting the companies in your same weight class. “You don’t ever want to find yourself competing with Amazon,” warns Bryan Bowers, CFO at SmartSign. “They are bigger, smarter, and have more money.”
Here at SmartSign, we know that there are broader commerce companies, both online and brick-and-mortar, that sell signs as part of their larger office or industrial product lineup. Sure, we could have diversified beyond signs, tags, and labels, into selling related product lines, but it might have weakened our ability to master our own domain. Bowers cautions growing businesses to think lean. “We’ve stayed away from office supplies, because Staples and OfficeMax did it better,” he explains.
3. Instead, bring something unique to the game
Possibly the most compelling argument for competitive intelligence is that you can do things differently and succeed where your competitors are struggling, or have failed. SmartSign took a huge leap on customers’ willingness to use online retail for the types of products that were long dominated by traditional catalog companies. “Customers were used to ordering these products from catalogs, but we knew from experience that those competitors were going to be slow to shift to the online space, whereas we were starting from scratch,” said Blair Brewster, CEO at SmartSign. Being an online retailer allows us to offer unprecedented customization, and that allows us to see the trends in our customers’ customized orders that might open up new venues.