As editorial director of the industry track at VidCon, I added a new track this year: back-to-back demos from technology startups in the online video space. I grouped them into four buckets – data and analytics tools, platforms, live streaming and a catch-all “other” category. My goal was to schedule similar companies back to back, to help attendees understand the nuances and differences of seemingly similar products. But the response from the invited companies – particularly those in a competitive set – was telling.
In the analytics space, Tubular Labs – arguably the market leader – embraced the competition. Allison Stern and Rob Gabel welcomed the opportunity to present along with their peers. Epoxy went even further. After spending an hour trying to convince me that they were not really focused on analytics – which led me to stick them in the “other” category – they ended up embracing their competitive set, and lobbied me to move them back into that group.
I was happy to do so, because it’s better for the attendees when similar companies in a demo environment are grouped together.
Contrast those examples, though, with one of our portfolio companies (who will remain nameless). They were less happy about showing their platform off next to a clear competitor in the space. Although they lobbied to be moved away, I held the line. It’s better, I explained, for the attendees to see two similar companies together. But it was also better for the company itself.
My reasoning: as a young company it’s always better to embrace the competition, learn from them, and strive to be better than them at every turn. In this particular case, the demo track at VidCon was a fairly painless way for this particular company to really see how it stacked up against a clear competitor. Win or lose (and there are no awards handed out at VidCon), it promises to be a great learning experience for this startup.
Virtually every company will have competition. You may think you’re unique and different, but the sooner you realize you’re not, the better your chance for success. Even if you really are demonstrably different, the rest of the world won’t see it that way. Investors, customers and the press always like to group things together to help simplify, organize and explain. We’re wired – as human beings – to do this sort of pattern matching. It’s how we kept from being eaten by tigers when we were denizens of the jungle, and how we handle the new and different today.
So that means you need to embrace your competitive set – or what the rest of the world perceives your competitive set to be. Spend a LOT of time evaluating what those other companies do well – and where they fall short. Be brutally honest about your own short-comings. Talk to customers and investors of those companies to seek out advantages and pitfalls.
Winning in the marketplace requires a lot of different variables to come together simultaneously. Your timing needs to be impeccable. You need to be the best solution out there. But you also need to be able to convincingly rise above your peer set in the minds of customers, investors and the press. And that can be a battle of both perception and reality. So embrace those opportunities to compare yourself to your competitive set. Be as obsessed with what they’re doing – and what they’re saying – as you are on your own product, users and pitch. The tech world is littered with examples where the best pure product lost out to a mediocre competitor who simply did a better job in the market.
Want some examples? Beats headphones are dreadful when it comes to sound quality. But they built a multi-billion dollar business on celebrity endorsement and branding. In the early days Windows was clearly inferior to both Linux and the Mac – but it won out because of its focus on corporations, developers and hardware vendors. Sony’s Betamax and mini-disc were clearly superior products, but VHS and MP3 won out in the end. Which is better? Lyft, Uber or Sidecar? You can fault some of Uber’s tactics, but clearly they’ve been laser focused on their competitors along with building a dynamite product. I could go on, but you get the idea.
The upshot: get to know your competitors as well as you know yourself. Then you can build better products, develop better positioning and clearly differentiate your company and your products. Because chances are that competitor is doing the same to you.