You need to be aware of the competitive environment you play in, for many reasons, in particular:

  • To know what the ‘best alternative’ of the customer is (very useful in negotiations)
  • To articulate to potential customers why they should be buying from you rather than the other guys
  • To let your business model evolve, and potentially change change your business model.

There are plenty of opportunities to learn about the competition. In the B2B area, when you loose an opportunity, you usually get feedback why you have lost. The feedback might not be the truth, but you do get feedback. The feedback help you for your positioning on the market. You need to remain agile and shift your business focus if you have to.

When you are a start-up, in the first 2 years, forget about the big players like Microsoft, Google, McKinsey… People worry too much that the big guys can copy their model:

  • Truth is: the market is big!
  • If you think that you are competing directly against them, you are naive: you are playing in a different market
  • If you are really good at what you do, the big guys are more likely to want to buy you (e.g. Cisco buying technology start-ups; Groupon buying foreign ‚mini Groupon‘ companies etc)
  • Key for small businesses is how you want to differentiate? Your skills need to be aligned with the market that you are addressing