Competition

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Never Criticize Your Competitors

via youtube.com

In this Video Loic Le Meur – well-known French entrepreneur from Silicon Valley – explains why it is the right thing to never criticize your competitors. Watch it, those 3:40 minutes are well spent…

Here is part of Loic’s reasoning (which I took from youtube):

One of the golden rules I have always applied to anything I do is to never criticize my competitors, here is why.

You never know what they or you will do next, they could be partners soon. I have many ex-competitors who became very close friends helping me all the time.

It is bad publicity for you, focus on the positives and improve your own product than try to criticize others. You build a bad image for yourself if you keep criticizing others.

They could buy your company. France Telecom launched in 98 a product directly competing with mine with an ad that looked like ours. Instead of criticizing I took them to lunch and a few weeks later they acquired my company.

Competition is good. Celebrate competition, it kicks your butt to deliver a better product faster. Celebrate it and just be better.

Competition grows your entire space. The more players on the market, generally the bigger the market.

Meet them. Have lunch. Exchange information. Both of you will learn. Don’t reveal all your plans, but some sharing is really good.

You could work with them to grow the space. I had launched with competitors in 96 the French Chapter of the Internet Advertising Bureau. We defined format standards for banner ads, put together a book and we all got more business from sharing and working together.

Say your competitors have great products and recommend them, you will build trust.

Even if the temptation is very high when you think what you do is better, never criticize them. If you want to be extreme, you could do what Robert Scoble does, instead of pitching his product, Robert pimps his good competitors and explain what are the important criteria to make a choice. A conversation starts and his image gets reinforced by the community reactions.

That is also what Tony Hsieh the CEO of Zappos does. If you call customer service and they do not have a product in stock, they recommend you to a competing site. The result is they are happy about their experience and likely to come back to you first next time they have something to buy.

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Competition and the market are like water, they go where they want

Here’s a way to think about it, inspired by Merlin Mann: Imagine that next year your company is going to make 10 million dollars instead of a hundred million dollars in profit. What would you do knowing that your profits were going to be far less than they are today? Because that’s exactly what the upstart with nothing to lose is going to do. Ten million in profit is a lot to someone starting with zero and trying to gain share. They don’t care that you made a hundred million last year from the old model.

If I’m an upstart publisher or a little-known author, you can bet I’m happy to sell my work at $5 and earn seventy cents a copy if I can sell a million.

Smart businesspeople focus on the things they have the power to change, not whining about the things they don’t.

Existing publishers have the power to change the form of what they do, increase the value, increase the speed, segment the audience, create communities, lead tribes, generate breakthroughs that make us gasp. They don’t have the power to demand that we pay more for the same stuff that others will sell for much less.

And if you think this is a post about the publishing business, I hope you’ll re-read it and think about how digital will change your industry too.

via sethgodin.typepad.com

This post by Seth Godin is so spot on, it hurts.

So please all you producers of music, movies, pictures etc. all you publishers of newspapers, don’t fight the digitalization of your industries. It’s a war you have already lost and will never be able to win.

Rethink your business models and follow the market or – even better – create a new market. There are plenty of great opportunities out there. And if you find yourself stuck in a declining market in 2-3 years from now (it has already happened as I posted in “Prepare For The Digital Age: The End Of Newspapers“), don’t blame the digital age for it. Markets will always be changing that’s there nature.

These are amazing times. Embrace them.

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