Tuesday, July 7, 2009

Separate Yourself From Your Competition

What a surprise . . . another great post today by Seth Godin, Taking The Leap. His blog this morning is about how market leaders tend to be head and shoulders above their competition with insulation that provides a considerable safety net.

In his words, Godin speaks of large market domination, siting examples that dominate the national / world scene. But the points he makes don't just apply to Big Conglomerates, but also to small "Mom and Pop" businesses in what ever market they define to be their market.

- If you are small Hair Salon in a small suburban town, it is possible to dominate YOUR geographic, demographic market.

- If you are small growing coffee shop chain in the Midwest, find out what separates you from your competition and build on it to grow and eventually dominate your market.

- Or if you are a Industrial Thread distribution company, it's possible to develop your systems in such a way that you grow and surpass your competition in such a powerful way that you build a chasm between you and them in your market.

Specifically, Godin offers three ways to separate yourself and build insulation:

- Spend your way to the top (Nike pulled this one off)
- Build an empire quietly, so that by the time any one notices you, they can't catch up (Build-a-Bear is a model for this).
- "Network Effect" (as he calls it), some markets are ready for one intermediary company to show up and be the default winner. (Twitter is an example of this).

Of the three ways to separate yourself from your competition, the one that you have the most control over is the second - build slowly and smartly under the radar (that is unless you are independently wealthy and / or just want to take the risk of being in the right place at the right time). And therefor the one that you should be focused on from a strategic perspective.

Unfortunately, building slowly under the radar requires consistency, discipline and focus - three things I find most small businesses lack.

The good news is that you don't have to be an MBA to pull this off. In fact, if you have formal training, you often tend to do what everyone else is already doing - which never leads to an enormous market advantage. Instead all you need to understand is three key points.

The essence to domination comes down:
  • Focus on and grow towards your vision - not just trying to beat the competition
  • Innovation and the development of a culture of constant improvement - where you examine your systems and how they work and improving them to better serve your needs and the needs of your customers.
  • Long term relationships with all your stakeholders built on mutual benefit: employees, shareholders, customers, suppliers, and local communities.
If you work on these three elements and do so diligently, before your competition even realizes what you are doing, you will have so much momentum that they can't even come close to catching you - for a long, long time.

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