GUEST BLOG: Why competition isn’t always bad for business

By Karen Lawlor, country manager for Ireland, Regus

No one really likes to lose. And while ‘a bit of healthy competition’ has been the staple mantra of sports coaches, teachers and parents for decades, it’s often a whole different story when it comes to your business. There’s an undeniable fear that rival companies will undercut you, steal your clients and poach your star talent.

But that all depends on your outlook. Your competitors don’t have to be your enemies – they can be your guinea pigs, your inspiration, or even your allies. Here are a few reasons why you should be glad your company has someone to beat.

Holding a monopoly on a particular market sounds like a dream come true but it’s not necessarily a positive thing. When you’re the sole provider to a market niche, it’s far too easy to get complacent. Without competitors nipping at your heels, you don’t have a reason to develop your product, improve your marketing or increase your efficiency – and after a few years of complacency, it’s that much harder to step up your game when a new business does finally enter the scene.

In a crowded market, however, you’re forced to differentiate yourself if you want to succeed. Comparing your business to another helps you position yourself in that market and you’ll be able to create and exploit your unique selling proposition.

“Competition is the greatest thing that can happen in business,” says Doreen Lorenzo of product invention company, Quirky. “It’s the best thing. Otherwise you get stale, you get fat, you get slow.”

THEY’LL GROOM THE MARKET FOR YOU

No matter how hard you push your marketing efforts, you can’t reach everyone. But your competitors can help you to fill the gaps. They might not be promoting your company, but they are spending their money to raise public awareness about your industry and its products, educating clients and customers about the benefits of products and services like yours. All you need to do is show them you’re better at it.

‘A bit of healthy competition’ becomes even more useful when you’re a daring start-up trying something completely unprecedented. Before Airbnb, the idea of staying in a stranger’s house was bizarre – but according to their New York City manager, Wrede Petersmeyer, we should be embracing our competitors: “They are out there convincing who you haven’t talked to yet that what you are trying to do is not a weird thing”.

For the most part, your competition probably isn’t stupid. They’re hard-working, smart entrepreneurs – just like you – and if they’re starting to change how they do things, you’d better take notice. If your rivals are adding new features to their products, introducing additional services or targeting different demographics, you really need to find out why. It doesn’t have to be a case of corporate espionage. It could be as simple as a direct, yet careful, sharing of ideas and information, which is why so many businesses are seeing the advantages of using co-working spaces.

But that doesn’t mean you should copy their every move. They’ll make mistakes, just like you do sometimes, and even if they don’t, what works well for them might not be a good fit for you. What’s important is that you don’t just relish their mistakes: you find out exactly why it didn’t work out, and apply the same logic to your own business decisions.

THEY CAN CREATE A TRIBAL EFFECT

When you’re the only company doing what you do, it’s much harder for your team to try and be the best. Ask any sports team who they’re going to beat, and they all know the answer: the other guys. You don’t have to demonize your rivals until your staff are thirsting for blood, but having a clear competitor to set your standards and goals against can rally your employees towards a common goal.

As a bonus, this innate human tendency towards tribalism isn’t just limited to your workforce. When two competing companies each have brands with a strong presence, their customers start to rally together in their defence, too. Just think of Apple vs. Microsoft, or even the Lakers vs. the Knicks: the loyalty of their customers or fans grows stronger as the rivalry intensifies.

It’s a well-worn cliché but you really should keep your enemies closer. It’s tough for smaller businesses to win big contracts, such as those from governmental bodies. But when smaller businesses can put aside their differences, they can put together their resources, their teams and their creativity to take on more than either one could handle individually.

But remember: these kinds of alliances are likely to be temporary. When the contract ends, you’ll probably end up going back to the old rivalry, so try not to reveal too many of your best secrets.