By Jeffrey Dirrenberger, CEO of VAULT
"Do you know your market? Do you know your competition?" These are the crucial questions that every entrepreneur encounters in the early stages of their business journey. While many claim to understand their market and their position within the competitive landscape, a deeper examination often reveals a different story. It's not uncommon for silence to fill the air when I inquire about their connections with key individuals within those specific companies.
Have you reached out to any of your competitors to jump on a call?
I have given this advice to numerous business owners over the years so here is a breakdown of why you should consider getting to know the owners of your competition sooner rather than later.
One of the primary concerns that holds people back from networking or engaging with potential competitors is the fear of intellectual property theft. The thought is, if I reveal my business secrets or strategies, they'll steal my idea or marketing plan.
But let's consider something: Have you ever worked within a massive organization? The truth is, people are busy working on their own projects, striving to advance their own agendas. It can take executives years to get their initiatives approved. So, the likelihood of someone dropping everything to pursue a brand-new, championless idea is slim. Ideas are commodities, and if you've thought of it, rest assured that there are hundreds of others around the world with the same vision, concept or idea. This same concept applies to small businesses as well.
The real challenge lies in execution. If you haven't achieved significant success with your idea yet (by capturing substantial market share), there's no need to worry about emulation. They might end up copying your project, but you'll have the head start. If they surpass you, it's on you. So, instead of fixating on the fear of idea theft, redirect your focus toward gaining real industry knowledge.
By fostering connections with your competitors, you open the doors to a wealth of industry insights and valuable knowledge. Networking with those who operate within the same space allows you to tap into a vast pool of collective experiences, learnings, and best practices. Engaging in conversations, exchanging ideas, and sharing challenges can provide you with a fresh perspective and help you uncover untapped opportunities. Embrace the power of collaboration and discover how the synergy created through these interactions can drive innovation, growth, and ultimately, your success.
Being an entrepreneur or a leader at a company puts you in a small group of individuals. Globally there are approximately 305 million startups created in a year. Of that number, only 1.35 million are tech startups (about .4 percent). Taking these numbers a bit closer to home – there are 31 million entrepreneurs in the United States. Although that may seem like a large number, it equates to only 16 percent of the adult workforce. Of that number, only 47,000 are tech startups.
And within that group, being in the same vertical as someone else makes it even smaller. It's common to find like-minded individuals who share the same passion, mindset and experience and want to start a company together. In fact, I've witnessed founders teaming up with their competition or companies acquiring others. However, these opportunities only arise if there is a pre-existing relationship.
Don't just focus on talking to active competitors, reach out to past companies as well. During your opportunity research phase, you should have already come across these companies, so reaching out shouldn't be difficult. Entrepreneurs love discussing their journey, as it occupies their thoughts throughout the day. Ultimately, these people may be more similar to you than you think.
Even if a startup has failed financially, they often see the story of that failure as a badge of honor. Feel free to ask them anything, as there are no limits. Learning about mistakes, market issues, and marketing strategies can be valuable. You can also inquire about interested employees, customer lists, or introductions to investors. If you uncover something that can significantly help your company grow, you might even be able to acquire certain assets at a low cost. Don't be afraid of initiating this dialogue—it's easier to accomplish than you might think!
Now that you have scheduled a meeting with your competitor, being truthful is always my recommendation. You don't have to disclose all your secrets, but being open is important for building healthy relationships. It's necessary to give, not just take, in order to establish meaningful connections. If you're unwilling to discuss troubled employees or sales difficulties, you may not make much progress. That's alright, as you don't need to befriend everyone all the time. However, having allies or a support system can be beneficial when facing challenges. Markets are constantly changing, so you never know if you might collaborate in the future.
It's time to shed the mindset of competition as a threat and reframe it as an opportunity. Embrace the notion that collaboration and cooperation can lead to greater achievements. So, step out of your comfort zone, reach out to your competitors, and start building meaningful relationships that will benefit both you and your business.
Remember, it's not about protecting an idea; it's about acquiring real industry knowledge and leveraging the power of collective intelligence. Let go of your fear of talking to your competitor and you see what doors it opens for you.
At Vault Innovation Group, we’re more than just another custom software development company — we’re a partner in your success. We specialize in helping companies ideate, build, and develop technology solutions across multiple industries.
For over a decade, we’ve solved design challenges, shipped purpose-driven products and software, and have successfully helped launch more than 60 tech companies. With a proven track record of results, VAULT uses technology to grow your business according to your specific goals.