【Lesson #5 - Don’t compete just for the sake of competing】
All is fair in love and war, or so they say. Oftentimes founders will move heaven and earth just to find out what their competitors are doing and how they can get a leg up--sometimes to the point where they lose sight of WHY they've started the business in the first place. In my chat with Chris Xue, Co-founder/COO of Novelship (AW#16), he reveals how in his quest to build Asia's leading online marketplace for limited edition sneakers and streetwear, he became blindsided by an over-optimization on squashing competition, while stressing why in hindsight a customer focus will ALWAYS trump a competitor focus.
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Beating out your competitors is an almost primal instinct. It’s also a topic that investors always ask about—”how are you different from xyz? How will you compete against them? What makes you the winning horse?”
Certainly, a lot of that emphasis had misguided our own efforts in the past. After relaunching our platform two years ago, we had an almost infatuation-like obsession with outflanking our enemy, tracking their every move, poaching key accounts, and outbidding them in ads, at least up until COVID came around.
The logical thing to do was go into hibernation. Who would want to buy hype sneakers in the midst of an economic downturn. Staying open would’ve meant higher burn, decreased runway, and less ammunition to fight against competitors when the economy recovers. All of our peers closed shop; even our investors encouraged us to shut down for a few months.
It was certainly compelling, but then we started thinking about our customers, and the thousands of sellers that depend on our platform to support their livelihood, whether it’s terms of paying bills, covering tuition, or supporting their own families. Upon that revelation, we applied to become an essential business and was eventually given a license to continue operating.
Unsuspectingly, buyers also continued buying, if not more. With no other platform running, Novelship became top of mind for customers. Growth accelerated, placing us miles ahead of our competitors.
Don’t get me wrong—competitors are important. It helps keep you sharp and innovative, and also proves that there’s demand for your product/service. But don’t compete just for the sake of competing. It blinds you, and keeps you from truly listening to and understanding what your customers want.
It’s ok to be aware of what your competitors are doing, but don’t let that be the sole driver in your decision making. It’s more important to understand how the competitors’ moves ultimately add value to the users, then you can sensibly determine whether or not to go down that path.
Applications for AW#22 are now open to founders targeting SEA, AI/IoT, or Blockchain/Defi -> https://bit.ly/2LOzhYU
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