Startups and small businesses are at greater risk for competitive failure than large businesses. They have no “fat” to cushion a competitive threat or to recover from a serious blunder. Entrepreneurs (especially early-stage ones) need to take the competition seriously.
For starters, I am not YFS (Young, Fabulous & Self-Employed). I am OCS (Old, Cranky & Self-employed).
My entrepreneurial venture has been successful for 26 years now. In the world of small business, this is close to an eternity. And being at this juncture, I hate to see entrepreneurs fail simply because they didn’t pay the right type of attention to competition. If I save one business owner from going under because he or she didn’t ask the right questions, it was worth writing this article.
Many entrepreneurs are bad at competitive intelligence
My business is dedicated to teaching managers and executives about competitive intelligence which is the method by which companies unmask opportunities and threats in the market.
Through the years I have trained thousands of business people in the world’s most successful companies. I’ve also seen entrepreneurs cherish being first to market with their brilliant idea or product, but forgetting that first move advantage is not enough. It happened to me too. After almost a decade of glorious loneliness at the top, competition entered my space as well. I actually trained my own competitors!
C’est la vie .
Do I keep a 30,000 feet overview of what’s happening in my competitive space? You bet. Do I follow those competitors closely, analyze traffic on their websites, compare their products, prices, keywords, AdWords, page load time, linking roots domain, changing text, quality of photos, mobile optimization, or zillion other minutia to mine, and obsess over social network chats about them and us?
Not for one minute .
The pundits’ advice is often bad advice
Go on LinkedIn, and a horde of consultants advise entrepreneurs to keep a close eye on competitors by watching social media like a hawk, tracking competitors’ online moves, analyzing site traffic patterns, and many other magical tricks.
This is simply bad advice.
If you want to stay in business, you can’t obsess about competitors.
Knowing what to look for, what is crucial, and what to ignore as a waste of time and resources. Web intelligence and web analytics are not competitive intelligence. Not by a mile. It’s a toy that makes it easy to “spy” on competitors, right from your desk, compiling tons of useless data.
If you are serious about your company’s long-term success, you don’t want to bring a toy gun to a real gun fight.
The real competitive questions worth asking
Real competitive intelligence answers the following very hard questions:
What do I offer that’s unique and who can truly benefit?
What are the activities that are crucial to this uniqueness? Which are the strongest links in delivering the offering? Who or what pose the real competitive threat to you?
How do I stop competitors from imitating quickly?
What are the strategic risks and opportunities opening up for us as the market changes?
The problem with relying heavily on web analytics and other online intelligence tools is that they replace strategic thinking with hyped up statistics or meaningless noise. This is a sure way to lose sight of the competition.
Internet trolling and social media obsession haven’t delivered one iota of better performance to anyone but the vendors supplying the tools.
For professionals like us who’ve been analyzing competition for decades for the Fortune 500, the hype surrounding web intelligence tools borders on the hilarious; its serious consequences, however, can lead to your company’s early demise.
Best advice ever: never follow competitors
Best advice #1: Never follow competitors.
Competitive intelligence is about competing, not chasing the tail of your competition, direct or indirect. Sometime, the best way to compete is actually to ignore competitors. That’s why Harvard Business School never succumbed to the wave of MOOCs free courses and cheap online education. The bankruptcy of now-defunct for-profit education chain Corinthian College is testament to the value of competitive perspective over foolishly following others.
Best advice # 2: A channel is just a channel.
Never forget that your company website is just a channel. What will make you win is what you offer on it and who needs it. If you don’t fill a real need you’d disappear, together with your fast-loading, button-happy, feature-rich mobile site with all the right SEO-grabbing keywords in place, state of the art technology just like everyone else.
Digital marketing is not strategic insight. Continuous alertness to possible market evolution requires the discipline to say “No!” That’s where strategic minds win.
There are dozens of companies today offering free or low-cost subscription web intelligence services (e.g., Alexa, Compete, HitWise, Google Trends, SimilarWeb and Tregia are just a small sample). Any of them a clear winner over the others? The same companies that allow you to “spy” on your competitors’ traffic and analyze their data to death can’t even win their own competitive race.
Technology is not a substitute for strategy
Best advice #3: Tech is no substitute for thinking.
This is the the third lesson I teach my high tech startup audience. If you are ready for hard work, it is worth it.
The realm of competitive intelligence is the realm of “standing out.” Do not obsess over competitors’ minutia. Obsesses over your strategy and its underlying competitive perspective. It is a magnitude harder than collecting web noise, but it will pay off if you get into the habit of answering strategic questions with real competitive intelligence.
Leave web analytics for the kids who get excited with toy guns. Don’t be young, foolish and self-employed.
This article has been edited and condensed.
Benjamin Gilad is the co-founder and president of the FGH-Academy of Competitive Intelligence, the leading institution that pioneered the training and certification of competitive intelligence professionals (CIP™) world-wide. He is a former strategy professor at Rutgers University’s School of Management, and author of three books on competitive intelligence’s role in companies’ success.