Investors want to know what you know about your business…
and the environment in which you will operate.
That includes forces working against you. Tom Landry, former head coach for the Dallas Cowboys football team, talks about practicing their offensive plays against a truly determined defensive team – without considering who or what is working against you, you cannot develop and effective winning strategy. You must understand who and what you are competing against.
Direct Competitors — Easy to spot
They can be perceived as doing exactly what you do. The challenge is to differentiate yourself in some unique way. Are you faster, bigger, better, closer, better financed…?
Indirect — Not so easy to spot
Your business proposition likely faces indirect competition from businesses that do not sell to the same demographic groups that your business will target for various reasons, such as proximity, price point or other significant distinctions between your product and theirs. They are competition, nonetheless! A new roof competes with a swimming pool, tennis court, new car, vacation – not just other roofing contractors! These businesses do not pose a direct threat to your proposition, but nonetheless offer similar but alternative products or services. How do you make your product or service their priority?
If you win, who loses? — Watch out for these guys!
(This is a question investors may or may not ask you, but they should!)
These competitors may be direct or indirect competitors and/or perhaps an entire industry endangered by your innovative (disruptive) product or service. Some people think it’s cool to be disruptive, but that’s not my leading reason for competing. My top priority is solving a problem, and it may just be disruptive to some established providers. Nevertheless, some people may not welcome your solution…
The cancer treatment industry is growing to $171 billion / year. If you actually cure cancer, what happens to the treatment industry? Poof! I’m actually a bit surprised that Elon Musk is still breathing, but he may have made a smart move by giving away his patents on electric cars. As you may have noticed, just about everything that runs on gasoline is being redesigned to become electric. Big oil?!?
I recommend reading: “The Ho Chi Minh Guerilla Warfare Handbook” by David Yurth. He uses the backdrop of the Vietnam War to illustrate how the leader of tiny North Vietnam got the mighty USA out of his country as a metaphor for defeating incumbents who are making money on the problem and therefore happy to see your solution fail. Likewise, how does an underfunded innovator compete in an industry that makes more money treating the problem than it would by simply solving it?
Pollution, garbage, water, food…
Some entrepreneurs take pride in being “disruptive.” If that’s you, just be careful how you poke the beast. Unless you have a lot of money, you would be wise to consider just how you “stick it to the man!” You may just find that you and your ideas just aren’t welcome here! We’ve all watched enough TV to stoke our imaginations with the depths of depravity — the lengths some people may go to stop you. Ya, they might kill you! And your little friends too… Think of this book as a modern Art of War for innovators.
We include a few customizable sample paragraphs under, “If you win, who loses?” within the Competition section of our BizPlanBuilder business planning software template to make sure that you identify and consider some potential hidden enemies to your success, in addition to the usual competitors. If you’ve really solved a problem, you may be in danger => Nikola Tesla, Royal Rife, Max Gerson…
Business Power Tools is here to support solutions succeeding in our world. If you have such a solution, read this book!
And subscribe to BizPlanBuilder so you’ll have a credible plan making your team a better bet than the other one.
We want you to be prepared and ahead of your competition as well as your investors.
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