Finding Opportunity in Competition
Do you ever feel like you’re the puny upstart, facing off against an 800-pound gorilla in the business world?
Well, size doesn’t confer immunity from obstacles. Just like tales of David and Goliath, sometimes the little guy can get the drop on the big guy.
In April 2018, Entrepreneur Magazine published an article titled How Small Startups Can Profit from Competitor’s Woes. It’s a great narrative on how a small company can benefit from keeping an eye on a large competitor, noting their problems, and offering their own pre-emptive solution.
Compete Against Their Weak Spot
The small company in the story is Empowered Staffing, a boutique recruitment firm forced to compete with big rivals with large staffs, huge advertising budgets and national name recognition. The story follows Daniel Miller, co-founder, and his savvy approach to sussing out his rivals’ weak spots.
Miller noticed that one big rival firm was posting the same job over and over again. With a little detective work, he figured out what was going on. Inexperienced recruiters were handling this account, prolonging job searches and providing inadequate candidates. He reached out to the client directly, with this message: “I know you guys are working with this firm. I’d love to have a chance to work with you. You don’t pay us until you make the hire. Compare our candidates to theirs, and if you like ours better, let us have a chance to fill more positions.”
It worked, and was the start of a very productive poaching effort.
For Daniel Miller’s part, he isn’t losing any sleep over his recruiting firm’s continued success. “Most of my competitors are very large corporations that have hundreds, if not thousands, of clients,” he says. “When we acquire one, they usually have not been getting the results they need from another firm, so I do not feel guilty winning over that business.” That’s great for his bottom line: Since Miller started strategically identifying competitors’ weak spots back in 2015, his revenue has grown more than 30 percent each year.
The article cites some parallel examples: When Uber recently upset consumers with a series of scandals, Lyft presented itself as the nicer company. When a major music label sued wedding videographers for including unlicensed music in videos, the licensing company Musicbed offered free music for those videos. When Bank of America announced a new $12 monthly charge for its previously free checking accounts, online bank Aspiration launched a promotion offering to pay $12 a month to any Bank of America customers who opened one of their free online accounts, capturing a bunch of business. When a high-end baby-gear store went out of business, a smaller company offered to honor their gift cards.
You already know you should examine your own weaknesses and turn them into strengths. Now try doing that about others’ weaknesses. Keep a close eye on your competitors, and don’t miss a chance to differentiate yourself strategically.
Takeaway points the author emphasizes: Don’t get cocky. Every business makes mistakes—make sure you’re not making yourself vulnerable. Be clear about what problems the competitor is actually responsible for, as opposed to problems that face the industry as a whole. Make sure you’re spotting an existing problem, not attempting to create or increase one for your own benefit.