You have probably heard it said, competition is good for business. Well I completely agree, and I have several reasons for why this is true.
1. Competitors inspire you to greatness. Right when Bearded Brothers was in the middle of the planning stages (an organic, raw, vegan energy bar company) another LOCAL, raw, vegan energy bar popped up in town. My first reaction was, “NOOOOO”. How can this be? I had been working hard for the past couple months nailing down suppliers, looking for kitchen space, and developing the brand. And now there was already a local competitor on the scene.
They weren’t the first either. Prior to Thunderbird Energetica was Baraka Bar. They were closer to the product we were planning to offer, but seemed to be going by the wayside. Sure enough, by the time we launched they were nowhere to be found. But Thunderbird was already growing fast and already had been in negotiations with Whole Foods before we landed our first retail account.
What this did was inspire us to step up our game. The flavors of bars we had been thinking of were mediocre and our branding was pretty lame. The flavors Thunderbird offered sounded appealing, so much so I rushed to their first store just to pick up a bar and try one for myself. Knowing we had another local company to compete with in addition to the already crowded energy bar market prompted us to step up our game, develop better flavors, and think outside the box with our branding.
2. You can also learn from their growth. Having started about the same time as Thunderbird we have been able to watch them grow. Although we don’t know all the intimate details of the growing pangs they experienced we were able to learn a lot through their own blog, Facebook and Twitter accounts.
We had a good idea of what a sustainable growth rate would be by watching them. We also read about the story of Clif Bar in the book Raising the Bar. The growth Clif was able to achieve was truly inspiring, and even more inspiring was the passing up of a $120MM sale of the company. Watching others grow helps combat doubts lingering in the back of the mind. But, be careful not to let your competitor’s growth increase doubts or discourage you because you are growing slower.
Remember every company grows at different rates, and just because one company is growing faster doesn’t mean they are better off. It may be easy to have a grass is greener mentality, but you never know how far in debt a competitor might be, or how much equity they have sold, etc. In my opinion you are better off to grow slower, have little to zero debt, and give away very little, if any equity. Look at Clif Bar, the company is 100% owned by two individuals.
3. Your competition becomes a measuring stick to tell why your product is the best. For example, Thunderbird’s products are raw, vegan, and mostly organic. But we wanted our products to be different. All of our bars are 100% organic (or close to it). We also created a bar larger than most on the market to provide more calories and simple carbs to fuel active individuals. Additionally we sought out to disclose which ingredients were not truly raw (heated above 115 degrees). Both Thunderbird and Bearded Brothers offer compostable wrappers, but our bars offer a resealable pouch (so you can eat half the bar now and save the rest for later), something no other energy bar offers. All of these things essentially become key selling points to the product.
4. Competitors can inspire each other to transform the entire industry. When we first launched Bearded Brothers we had no idea compostable wrappers were an option in the bar category, even though we had seen a few other food companies use compostable packaging. Part of our reasoning behind the resalable pouches was to encourage reuse.
Being a company that is advocating sustainability we couldn’t pass up the possibility of switching to a compostable wrapper, but we also wanted to maintain the resalable pouch that many of our customers liked. After a lot of searching we found a company that was able to produce the compostable package for us with the resalable feature. We became the first consumer packaged good to offer a product that was resealable and compostable. But without companies like Thunderbird and Boulder Valley Chips, we would likely still be using our natural kraft packages that we started with.
Our hope is that other companies will follow in the footsteps of Thunderbird and us.
5. Competition keeps you on your toes. Without competition in the market you aren’t likely to provide great services and products to your customers. Think about cable and phone companies; most towns only have a couple of options, some only have one. The result is horrible service! If you have ever tried to dispute a bill or call about a disruption in services you know what I mean.
Having a competitor means you have to always be on our A game. You have to care about your customers, respond to their emails, engage them in meaningful ways, and provide them with products that are superior to the rest of the market.
So don’t let your competition scare you. Let them inspire you to become better. Also, be yourself! To quote Ben Folds, “There is always someone cooler than you”. If you aren’t being yourself you will never be cool to anybody. It can be tempting to become something you are not just to grow your company, but your customers want you to be genuine – that will win over cool factor any day. If you focus on what you do best as a company the growth will follow naturally (and at a sustainable rate).