Whether you’re starting up in a relatively new industry or entering a crowded market, competition is a fact of life for business owners.
That said, no matter how good you are at what you do, it doesn’t hurt to build more barriers to entry to keep the most threatening competitors at bay—so you focus on dominating your niche.
Twelve YEC founders offer their best strategies for staying one step ahead.
Innovate
The best way to keep competition at bay is to keep them one step behind you. Keep leadership and key development talent focused on innovating and thinking about what is next. If you can do this and execute, your competition will constantly be trying to keep up.
Remember that innovation can be more than product features. Think in terms of how your customers’ needs will evolve as the market evolves and create the user experience and offering to reflect these changing needs. This way when they say “it’d be great if it did this” you’ll be releasing that feature the next day. That’s a barrier to entry that is difficult to overcome.
—Andrew Thomas, SkyBell Technologies, Inc.
Create, Don’t Compete
If you want to stay ahead of the competition and delight customers, innovate. As long as you are focused on creating you are never competing. The idea of scarcity needs to be kept at bay, there is plenty of business to go around. Spending time creating the best value for your market place will ensure long term success.
Raise Prices
Want to demolish your competition? Provide far more value and charge for it. Be the elite in your industry. Others can then enter the market to create the cheaper model, but they won’t be real competition because you’ll be going after a different segment that prefers, expects and appreciates elite service.
—Corey Blake, Round Table Companies
Be Your Strongest Competition
To prevent competition, we try to be our own strongest competition. We challenge ourselves. People ask, “Aren’t you afraid of a new competitor coming in and undercutting you on price?” I say, “Well, I want to go in and undercut ourselves by lowering our prices for our customers before anyone else forces us to do it.”
The key is to constantly push and keep challenging yourself to increasingly provide more value for your customers.
Write a Book
To keep your competition at bay, you should position yourself as the go-to person/resource in your field/industry. This means doing consistent marketing, capitalizing on press opportunities and staying on top of SEO (to name just a few things). Writing a book can boost your profile a great deal, as well. You don’t even have to write a bestseller. Just being able to say you wrote the book gives you greater weight with most people.
—Christopher Hurn, Mercantile Capital Corporation
Create a Moat
Think about how to keep your consumers and audience locked into your product/service. That offering is the “moat,” a way to directly speak to your audience no matter what competition crops up or how the environment changes. Examples can be a subscription product, collecting contact information, an email or newsletter.
Build on User-Generated Content
Harnessing large amounts of authentic user-generated content that is unique and rich is ultimately one of the best barriers of entry. Many companies have services and use APIs and data sources, but if you have high-quality proprietary content and can build on it, you’ll naturally create a moat around your business that keeps users coming back.
Own the Process
I have found that when you define the sales and delivery process, you have the opportunity to raise the barrier of entry for your competition. They are forced to either adapt to your style or try to sell against it. Defining the product or service with a solid process helps to ensure that you are the dominant player in the marketplace. The higher you set the bar with more defined processes, the harder it is for your competition to raise it.
Emphasize the Intangibles
One strategy we use to create moats in our industry is to emphasize and exploit our intangibles. Our integrity, honesty and reputation are very important to us. We stress open communication with our clients and move quickly to provide them an excellent service. The strength and reputation of our brand creates an economic moat for our companies.
—Joseph P. DeWoody, Clear Fork Royalty
Do the Impossible
Is there a problem in your industry that’s widely acknowledged as impossible to solve—something that just has to be tolerated? Ask your best people how it can be solved, and give them time and resources to come up with an answer. If the answer seems feasible, pursue it.
If you succeed, you’ll catch your industry off guard, have a huge head start and be recognized as the industry’s technical leader. Most major innovations were “impossible” before they suddenly weren’t anymore, and those that prove everyone wrong often own markets for many years.
Build Better Relationships
Everything is about relationship building. If you want to lock people out of your industry, then focus on creating deeper relationships at several different levels therein. It doesn’t mean you need to make friends with conglomerates; it means building relationships from the ground up so you can create loyalty.
—Benish Shah, Before the Label
Innovate
Out-innovate the competition. Make sure you are at the bleeding edge. Every time they catch up, you’ll be ahead of them already. Every time a new entrant appears, it will lack the expertise of the latest tools that you will have developed.
