In search of competition

If your pipes break at 3 am, Roto Rooter is happy.

They’re organized for emergencies like this, for moments when you have no choice but to do business with them. Since you’re out of options, their high-priced service is your best shot.

They do far less well in the light of day, when you can take your time and compare plumbers and perhaps bargain a little.

Some businesses prefer to catch you when you have no choice. They use market conditions or even patents to ensure that they can be the bully. I’m not sure that there’s anything wrong with this, but I’m certain that it is a deliberate choice.

Other businesses, like Amazon, do better when they have lots of competition. Amazon has made it easy for other vendors to use their technology platform and even to sell items on their site. Why? Because they understand that more competition brings more attention, more business, more commerce. And since they are organized for volume and are eager to compete, more competition helps them.

The only way to enjoy competition is to have something different, or better, or something that scales. You need to offer a community that increases in value as it scales, or a unique perspective or technology.

Compare Amazon to the folks that make the Invisible Fence® dog containment system. They hate competition. In my experience, they have really high prices, nasty policies and a take-it-or-leave-it attitude. That’s okay, as long as you really don’t have a choice–you need a system like this, and they have it. If there were a transparent market for this product, they’d fail in a heartbeat.

Of course, nothing lasts forever, and competition does show up. Then what?

If you run your restaurant knowing that there are dozens of other restaurants on your block, things will be easier when in fact there are other restaurants down the block.

Which situation benefits your church or your political candidate or your store? Do you do better when you’re the only choice, with all the power that this brings, or when there are many choices, with all the audience and excitement that this brings?

You can pretend that you are unique, that you have no competition and never will. Inevitably, this will create an attitude that, while fun for a while, will probably harm you later. The alternative is to acknowledge that the competition exists and in fact, to encourage it. I have never met an author who believes that her book is the only one in the world you can buy… and this realization changes the way books are written and marketed.

The internet turns just about every category of goods or service into a bookstore-like bazaar of competition. You can either fight that or encourage it. No one will be exactly like you, not if you work hard, but it’s inevitable that there will be replacements just a click away.