Category Archives: competition

Innovators widen their view of competition

I’m sure you’ve been in meetings where everyone worries about competition more than they worry about customers. It is a fact that for traditionally run businesses, any talk about strategy quickly shifts to competition. It’s unavoidable and it pisses me off.  Traditional business practice is based on beating the competition, which assumes that there is competition that looks and plays just like you if you are starting a business.

How can a business differentiate without changing the product itself?

How can a business differentiate without changing the product itself?

Via Quora: What can you change in a business that is strong enough to differentiate the business from all competitors, but without touching the product itself?

For example,

  • GILT, changed PRICE but didn’t change product, and opened a niche for discounted designer clothes.
  • Phones International, changed the DISTRIBUTION MODEL of the mobile phone industry but it didn’t change the product (cell phones), and opened a niche for ‘single brand distribution.
  • The Book People, changed the TARGET CUSTOMERS, but didn’t change the product (books), and opened a niche selling books to corporate clients.
  • Adwords, changed the BUSINESS MODEL, but didn’t change the product (display ads), and opened a niche for ‘performance advertising’.

These are significant differences that not only differentiate the companies from all the others, but disrupted the market in some way.

What other variables can you change in a business in this way?

How are these variables called?

Where can I learn more about this?

3 Ways to help customers win

“It’s not enough that we win; all others must lose.” – Larry Ellison

Heard this one yesterday. I’m all in for competition, but business isn’t about war (at some point I used to think like Genghis Khan too). It isn’t about beating competitors just for the heck of it. I find this focus on competing to beat competitors ridiculous.

The focus SHOULD be on the customer winning.

Competitive advantage in social media: Carpe Diem Stupid!

APC Back-UPS ES 500 surge protector

R.I.P. after 6 years of use

Yesterday one of the surge protectors in my house, the Back-UPS 500 from APC, finally gave up on me after 6 years. Since I’m using another surge protector from Belkin to protect other electronic devices already, I ran over to Office Depot to buy replacement for the APC.

I ended up buying a Belkin.

As I was driving home I started thinking about why I bought a Belkin surge protector and not another one from APC. My conclusion was that I think I got ‘primed’ to buy Belkin because I simply liked (looks and price) the other one I have at home more than my older one from APC. I also think that the fact that the APC one died one me affected my decision.  A product that breaks down on you isn’t going to inspire you to buy the same one.

It matters how you play the game. Not just being first.

A few weeks ago Techcrunch published an article about a startup that got seed money from a well know group of VC’s. And because this startup is working on a similar concept that my team and I are developing, it got my attention. I immediately sent it to my crew. Their reaction was interesting. Basically they thought that that was it for us. That we got beat to the punch. That we had spent a good amount of our time working on this and that now we got beat.


Here’s the thing. We haven’t gotten beat and nobody’s won because even they don’t know what they have yet. Heck they’re still in beta. If anything, seeing that they got seed money and seeing the comments that people left on the article validates our idea (which also helps us show everyone else that we’re not so crazy!). Another thing is that their market entry concept is our minimum marketable feature concept. In other words we have a completely different vision but had to simplify it to create the initial prototype; which is what they have.

But there’s another reason not to get down…

It matters how you play the game.

There are countless stories or startups that came up with the original idea but were beat later on by a late entry. How many people remember Friendster? How many people remember MySpace? Where are they now and who’s the King of the Hill? Facebook.

Another recent example is Groupon, which has spawned thousands of copycats all over the world. Though Groupon has a lot of money in the bank and is the market leader, it’s dropped the ball in how it resolves customer issues and is having trouble making the business model work for customers. And, competitors such as LivingSocial have preyed on Groupon’s mistakes.

There is no clear view of how that business is going to play out yet.

Another late entrant was Apple. Everyone seems to think Apple was the first one to come up with the iPod. Well, they were not. They merely improved on the Sony Stickman, added iTunes and voila! A new platform is born.

So there you go.

Competition is rivalry between business models

What matters is getting the business model right. Sure, Google wouldn’t be Google if it didn’t have a better search engine than Yahoo and other alternatives. But it would not have gotten to where it is if hadn’t figure out the business model that powers it’s innovation engine.

That’s when everything changed.

The same thing is going with the business model experimentation that is going on with social networks. We’ve got a long way to go!

It’s more than just about technology

I have a friend who’s a manager at a Victoria’s Secrets retail store. She recently told me that VS is making some policy changes in how it deals with returns and how it hires people. They want to hire people who are friendly because the problem is that sales associates are not very nice with customers. These customers then call customer service to complain. She says that what customers complain about are things such as cashiers not smiling, not looking at people and talking very fast.

This is basic stuff if you ask me. Here’s another example from a few days ago.

Last Friday I was in Tijuana and stopped at a bank (foreign to my account) to withdraw some money. Apparently the ATM machines were not working properly, they were having trouble giving you money. I had to try two times to get money. The first transaction was charged to my account even though I didn’t actually get any money. I did this in front of an ‘executive’ who told me that I would not get charged. I asked him if he was sure to which he responded nervously, started stuttering and got red in the face; a sure sign he’s just following protocol.

I was skeptical and told him I would come back later after I had checked my account activity online. He was wrong of course. I did get charged. I went back to the bank to get ‘my problem fixed’ to no avail. I got ignored and was told to talk to my US bank to get this fixed. Frustrated, I called Bank of America to get some answers. The gentlemen who answered the phone was friendly and courteous. He asked me questions about my problem, a clear sign of empathy. He acted like a human. And though my problem is still not resolved, he answered my questions and told me exactly what I needed to do.

I got my problem fixed today. All it took was 5 minutes.


Situations like these are common and most of the time are the difference maker in the interaction we have with a business. Technology takes center stage as the killer app, but let’s not forget that humans (most of the time with no technological background) are our customers. Not robots!

Being first doesn’t necessarily mean being relevant

It’s easy to get caught up with emotions because some other startup appeared on TechCrunch before you did. It’s the nature of this thing called entrepreneurship. But just remember one thing:

Startups don’t become relevant by focusing technology, they become big businesses by focusing on being better humans.

And it’s the big businesses or the startups that seem to think ‘they’ve made itthat consistently forget this simple principle. So, this leaves us with: It’s matters less if you are first if you are not relevant.


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Don’t look for examples, be the example

I have a client who has (so far) the only SaaS payroll management solution for small businesses in Mexico. This is both great and bad. Let me explain…

In our initial meeting I was told they used Workday as an example to follow. Their reasoning was that Workday has a very simple to use and intuitive interface, plus they are the ‘leaders’ in the field. The studied them rigorously and brought the same principles over to their solution.

This hasn’t worked as planned.

Workday has and used a distinct set of capabilities that my client doesn’t have (development experience in new technologies for one). Plus the customer is also different. And Workday’s cluster of capabilities go beyond simple copy and paste design, look and feel.

These cluster of capabilities have to solve the customers problem, make his life easier. Ultimately that’s what matters.

benchmarking against the competition is stupid