I received an email from an AmpedSense customer the other day, after I guided him through setting it up. I always ask for feedback, including inquiring about how he found out about the product. In his response he pointed to something that caught me off guard:
What’s that? Competition??
Did you catch he mentioned another company’s name in there? Could they be a competitor? Upon looking into it, they are exactly that – an AdSense split testing service. Oh crap. That’s what my plugin provides. Should I be freaking out??
I know our first reaction is to freak out when we learn of a new competitor. Especially if you think you were the only one previously. Are they better than me? Cheaper than me? Could they put me out of business overnight?!
Competition is GOOD
Take a deep breath, Shane. Remind yourself that competition is good. And here’s why:
1) Competition validates your idea. What a better way to prove there’s demand for your product than to have someone else build a similar product. Now you know for sure there’s at least one other potential customer. And if they have more potential customers (most likely), then so do I.
2) Comptetition helps define your niche. When starting out, it can be hard to figure out what sets you apart from the rest. With competition, you’re forced to become unique. This company works with any website that has over 10,000 visitors per month. AmpedSense is targeted for wordpress sites of any size. Although our end goal is the same, those are two very different niches.
3) Competition keeps you on your toes. If I had no competition, I could leave my product in cruise-control. That’s a bummer for your customers since your product will stagnate. By keeping an eye on my competitors, I’m forced to develop new features, which makes my users happy. Happy users = Good sales.
4) Competition can drive traffic. Yup, I can benefit from my competitor’s marketing. Notice how the person who emailed me found me only after being provoked by my competitor? Their advertising causes search demand to go up, which brings me more traffic if I adjust my SEO accordingly. For example, I can now drive people searching for “competitor reviews” to my site if I create a comparison page.
My workload increases
While all the above is good, it doesn’t mean I can go throw a party. All of these positive effects also require a bit more work for me. Every time you find a new competitor, plan to spend a bit more time working on beating them.
Thinking through all this has helped me realize that I’ve made a few mistakes recently:
1) I should have found out about this competitor myself. I was lucky a customer told me about them, and I shouldn’t be relying on that. I should be setting up some automated alerts, such as google alerts.
2) I’m already aware of a few other competitors, but I’m not optimized for them. I should be determining exactly what makes my product different from the others and specifically calling attention to those features. I’m neglecting to point out how I stand out.
Looks like I have some work to do…
I’m not trying to calm all your worries about your competitors – remember that they are actively trying to steal your sales. But just realize that a new competitor is not the end of the world. There are lots of positives, so keep your chin up and stop freaking out (and certainly don’t immediately give up).
Consider that the worst case scenario is they are superior to you in every way, and they do put you out of business. How long do you think that will take? I can promise you it won’t be overnight, in fact you’ll probably still have customers paying you for a while. While months are going by before your customers are aware of your competitor, you’ll have plenty of time to pivot and adjust.
Remember Blockbuster video? Netflix was better than them in many ways, and it took them over 13 years before they were in charge (1997 Netflix founded – 2013 Blockbuster bankruptcy).
“A new competitor will rarely put you out of business overnight. It took Netflix over 13 years to beat Blockbuster” [Click to tweet]
Do you freak out when you come across new competitors? How can you be using them to your advantage?