How Competition Works
Relate is on US 101, How Competition Works, You will know if your VP Sales isn't going to work out in 30 days
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How Competition Works
If you want to get good at a game, you must understand the nature of that game. However, even the leaders in the market do not understand the game of business.
Most people think there are two ways to understand competition.
- Competition is all that matters.
- When Google+ launched, Mark Zuckerberg put up a poster with "Carthago delenda est" (Carthago must fall) and forced everyone to work long hours with limited time off.
- They think business is like a war. Winning means destroying the other side.
- Competition does not exist.
- Jason Fried, Co-founder and CEO of Basecamp does not believe in competition. There are always people who need your product, so market to them, not against others.
- They think business is like a 3rd grade art class. It's to show what they can do.
However, business is neither a war nor a 3rd grade art class. It's somewhere in between.
People have unique desires, so it's better to take a unique position than take someone else's position.
If a business was war, then it will become a pricing competition, and profits will quickly erode, leaving nothing behind for everyone.
On the other hand, if a business was a 3rd grade art class, it should reward you no matter what you make. However, in business, there are both successes and failures.
Michael Porter, in his book Competitive Strategy, argues that it's better to compete to be unique, rather than trying to be the best in the market.
When thinking about water, it's very simple. It's just water. However, it evolved based on what people desired.
This is how competition works. The market evolves based on what people desire. The same concept applies to not just water, but also computers, transportation, soaps, and all other categories of markets.
It's simple. You should not look at competition as a war or 3rd grade art class. You should look at competition with a frame of evolution and ecosystem.
There are two action items.
- For existing businesses: Defend your niche.
- For new businesses: Find the pattern of market evolution, and find something new and unique.
#VP of Sales
If Your VP Sales Isn't Going to Work Out - You'll Know in 30 Days
Here are two questions to know if your new VP of Sales isn't going to work out in 30 days.
- Did your VP of Sales bring in at least 1-2 great reps in the first 30 days?
- Did your VP of Sales get rid of the worst rep you have in the first 30 days?
What a great VP of Sales does is recruiting and team building. Then, backfilling and improving the team to grow revenues.
Relate is a simple CRM software built for B2B SaaS startups. We're in private beta! If you're down to try, reach out to us!