"My Business Has No Competitors"

Strategy & Entrepreneurship

"My Business Has No Competitors" Why those five words make investors nervous — and what to do instead

I cringe every time I hear it from a client. I also find myself quietly hoping they haven't shared this belief with an investor. If you don't have competitors, you don't have a business.

There are many reasons why your business needs competitors — and why you should know exactly who they are. Let's begin with three: if there isn't a competitor, is it a problem worth solving? Good competition makes you better and your business stronger. And very often, more is more.

What problem are you solving?

Whatever problem you're trying to solve, if it matters enough to your future customers, they are already solving it another way.

Want to run a food truck serving healthy vegan food? "We have no competitors!" You do — because your customers are currently solving this problem. Maybe they're grabbing a specific item from another food truck. Maybe they're bringing food from home.

Have a supplement that regrows thinning hair? Your potential customer might be spending money on hair plugs. Or hats. If customers aren't finding any solution for their problem, ask yourself: is that problem important enough to build a business around?

"When you tell an investor your idea has no competitors, what they often hear is: I haven't done my research."

Competition makes you stronger

Even before the US got World Cup fever, the local kids in my town were soccer fanatics. A half-dozen U12 players recently joined a rec league that takes them out of our tiny county, playing against larger and more established teams around the state. Some of our kids are getting clobbered — because they've never faced real competition before. But they're also quickly becoming better players. And, unsurprisingly, they're having more fun.

The same dynamic plays out in business. A worthy opponent sharpens your thinking, forces you to articulate your differentiation, and pushes you to keep improving. The absence of competition isn't a moat — it's a warning sign.

More is more

Many times, having competitors can actually bring you business — even if the competition is right next door. It's why antique shops cluster near other antique shops. You might not drive 30 minutes for one antique store, but you will for three.

Breweries, bars, and restaurants work the same way. So does high-tech. Tesla was once seen as the only game in town — but with more competition, more people are buying EVs, and manufacturers are competing to be the best in the category while carving out their own unique qualities. (I'm personally holding out for the Scout EV.)

Competitors don't just validate your market. Sometimes they help create it.

Three things to do today

01

Know who your competitors are early on. They represent how your future customers are solving their problems right now.

02

Find your best competitor and treat them like a worthy opponent. They will make you stronger.

03

Remember that sometimes more is more — your competitors can help you find your customers.