Competition is one of the most misunderstood activities of the
marketplace, usually because plain bad behavior is confused with productive, cooperative competition. This blog will focus on competition– I’ll talk more about cooperation in a later piece.
Without healthy competition the market does not have much movement. At present economists are working to tamp down some of the markets natural volatility, and while this experiment causes untold pain in some quarters, it cramps all of us. Less movement means less opportunity. Less choice. Less innovation.
Why? Some players have a strong incentive to design the market around the safer course of slowly extracting profits from necessities such as fuel, food, and housing. The pressure to increase profits can only be answered by taking more and more disposable income from what we may deign as ‘luxuries.’ These include, though you may laugh, such indispensables as internet service and cell phones.
Obviously, those who wish to create wealth, either through investment or innovation, are at odds with those who would prefer to increase their profits and drive out a commonly accessed market for technology, entertainment and the like.
Opposed to these vested interests are those who wish to create wealth (entrepreneurship at its finest does this by definition.)
Why? This wealth can only come from markets regarded quite jealously by vested institutional and corporate powers. In addition, their markets are not so reliable after all, and people are able to significantly impact those markets, for example by eating less, changing their shopping patterns, and using housing and fuel more efficiently. (Obviously, consumers won’t make such sacrifices for experiences that don’t yield considerable satisfaction, but the fact that they are willing to is significant.)
Since the larger picture includes an economy that is continues to contract, no new wealth is being created—actually we are leaking wealth. So there is less to go around. And here is the problem in an economy with no surplus disposable income floating around.
You have to convince consumers to give up something (make a sacrifice) to try your product or service.
Even if the consumer was dissatisfied, you can still be sure they will consider it a sacrifice.
It’s simple: to succeed in an established industry, you must take customers from another company or institution (like the post office or universities). If you want to bring something entirely new to the market, you have to persuade consumers to give up another behavior and acquire a new habits.This is quite the feat of marketing, and if the promises aren’t delivered, you can bet those customers will scatter as quickly as they gathered, which is what we’ve seen lately. No matter what the hype, brand loyalty is only built by satisfied customers.
The challenges small businesses, self-employed professionals and entrepreneurs have to face are not small: they have to compete with the corporate state while coping with rapidly changing conditions. They will have to twice as smart as their competition while facing limited resources and an unreliable supply chain. Creativity, flexibility, determination and a commitment to ‘find a way,’ will separate the winners from the losers.
In essence, the present markets offers many opportunities for those who can take risks and innovate, but it also presents many dangers. The good new is that innovation springs up beneath the heel of necessity. The models that emerge will transform every aspect of business, from product development to market engagement.
And the other great news? People are ready to change their behavior if they can have a more positive experience, and they are ready to be loyal. This creates opportunities that entrepreneurs and small business owners are actually better positioned to exploit than the slow-moving, administration-saddled corporations. Thus small, lean companies can muscle their way in with a good strategy, strong allies and a quality product.
If you want to live, you must compete, and you should want to, because competition is the mechanism for market changes. In principle, this is why people advocate free markets and say the market will self-regulate. In reality, unbridled competition is less of a problem than oppressive monopolies and a culture of mediocrity and dwindling choice—exactly what the world is suffering from right now.
Starting to see why business people have to be ready to compete?
Only by bringing excellence to market can we destroy the culture of mediocrity that suppresses all innovation and advances. Mediocrity can only survive by replicating itself in the absence of predators.
So, do whatever you have to do to awaken the animal within. Take a boxing class or glut your sensibilities on Homeric verse:
So when a lion ranging o’er the lawns.
Finds, on some grassy lair, the couching fawns,
Their bones he cracks, their reeking vitals draws,
And grinds the quivering flesh with bloody jaws.
Or reflect, along with emperor Marcus Aurelius, on the sublime beauty of the “drip of foam from the wild boar’s jaws.”
Competition is part of life. Cunning, wile, guile, secrecy, and a certain reptilian creepingness can be witnessed across the panorama of biological life, so it can be no surprise to note their presence wherever we find human congress.
Have a great idea? Find a way to bring it to market. Be ready to compete like an animal.
Don’t succumb to the hypnotic lull of mediocrity. Sharpen your business claws and make the world safe for innovation.