As you know from my previous blog post, I took a new job – building whole new product for Phonexia. The first week started nice – meeting clever people, talking about the market and about the technology. But on Thursday… BIG company announced they will launch product that is very similar to ours. Ouch!
Well, some people would resign and stop working on the product… but there is other approach to such a situation.
Here are 5 reasons why to consider new big competitor a positive thing.
#1: Market Validation Confirmation
Big companies don’t launch new products without good market research (right, there are always exceptions). If you were not sure based on your research whether your product might be valuable for someone or not, now you can be more certain. At least someone else thinks there is a market big enough to earn a fortune.
But there is always a catch – Creating the same product as a big company doesn’t guarantee you success. The product can be similar or the same, but big competitor has probably very good go-to market strategy and well prepared distribution channels. And you don’t.
#2: Professional Inspiration
Your opponent was faster than you. He/she probably brought some interesting ideas you never thought about together with their product. Just order one device/service to test and get inspired. What is good about it and what is bad? How is it different to your product and your customers?
I will not disclose what company announced similar solution to Phonexia, but to be honest – their product seems to be such lovely that I want it at home myself.
Just a simple thing: If your competitor is active on twitter of Facebook, follow her. You will learn a lot about them. Daily.
#3: Saving money on Market Education
Were your customers not sure if they could trust your innovative solution? Is it too “new” and “unexplored” for them? They can become more trustful with well-known player on the field. Big player will educate the market on their own expenses. Then you can surf on this wave. And sell more easily.
#4: Need for differentiation
Competitor did the first move. Well, you are one step behind but they show up piece of their strategy. Now it’s even more important than before to know what is your competitive advantage. Arrival of a big player will also help you focus on one market segment thus preventing many startups to fail of broad approach.
Are you going to chase the very same customers as your opponent? Probably not. It’s time for you to differentiate.
Since your competitor is launching a fully functional product and you are still working on yours, you are under higher pressure than ever before. And that is a good thing. Everybody is working better under pressure.
It doesn’t matter if you planned for the competition or not. It happens. Always.
Don’t quit when BIG rival comes. Consider it a positive thing. If you are working on a product for a year and still don’t have massive competitor, you should be worried. You might be working on product that nobody wants.