I guess the trick here is-- if there
could be a trick-- is less about charting all
of the possible priorities, but really understanding,
what are the most important ones?
Because as a start-up.
You don't have the resources to satisfy all of the priorities.
That is absolutely correct.
So here, we're going to focus only on those top two.
And then we're going to do them real well.
This is a check and balance in the system
to find out if something is not going to work.
We don't want to go forth and invest in the product
and invest in doing more market research
if we already know that we're not
going to be the best of breed.
Because we can't be just a me-too product.
We have to be significantly better.
So this is a point where you iterate again,
like we do with so many other steps.
We iterate until we figure out for which customer can we
create significantly more value than anybody else.
I hope this is not a discouraging scenario
for entrepreneurs when they don't end up
in the top right hand corner.
It's not going to be right from the get go.
And getting an answer like this that
shows you're not in the upper right hand corner, now
is much easier than if you proceed further down the path
and you spend a lot more money and time and effort on it
and then you find out it's not going to work.
If it's not going to work you want to find out earlier.
And then you want to adjust.
And so often when this happens you go back
and you realize that, oh, we didn't quite
have exactly the right persona.
Or actually, we need to refine our core
and think in a different way.
And that's all good.
That's how you win, is making adjustments.
So, on the one hand, the step of charting
your competitive position is quite straightforward.
If you understand your persona and you understand
their priorities, at least you know where you are.
But that doesn't cover you studying your competition,
figuring out are they serving the same customer,
the same persona?
And are they doing as good a job as you are?
What's the right way to actually research your competition?
You look at them holistically.
You say, what customer are they targeting?
You know, basically, who is their persona?
And how well are they meeting that persona's needs?
And then that's how you think about it.
You don't just think of feature, feature, feature, feature.
Or you're just going to duplicate their product.
And then that's really not going to add much value.
But if you focus on who's their customer, then you can say,
well, our customer is different.
Then you could have a product that
might seem inferior to that one, but the way it's configured
is more valuable to your target customer than their target
customer.
And that's frequently what happens.
How can someone studying me as competition
figure out who really is my persona, who
really is my target customer?
Well, if they're a well-run company,
you can't hide who your persona is.
You can look at it.
If you're looking at Verizon, Verizon's tagline
is reliability.
So you know that they're competing for the business
customer.
Now, on the other hand, you might
have AT&T, which is saying their tagline is
low cost of some variety.
You know what they're competing for.
And so it's relatively easy to look at a well-run company
and figure out their persona is.
And if you can figure it out, well then, you probably
have a good opportunity of beating them
if you execute well.
A lot of entrepreneurs struggle with the idea
of presenting their competition because they
feel they are attacking completely
new markets that are untapped.
What do you think about those scenarios
where it is a new market and maybe there is no competition?
If there's no competition, that means there's no market.
If there's a market, then there's
going to be competition.
And the first competition that will exist
is the way that they're doing it today
because the world still exists today.
So that's the competition to start with.
But you have to not only have the competition that
exists today, but you have to anticipate
where the competition will come from in the future as well.
So, it's not an acceptable answer
in our class to say there's no competition because that
indicates there's no market.
There is competition by definition
because they're doing something today,
or they're not doing something today.
So that is your competition.
And then, if it is a good market,
there will be competition in the future.
And then the question is, do you anticipate that?
And this goes back to the core we were talking about.
Entrepreneurship is not a game of checkers
where you just worry about the next move.
It's three dimensional chess, and you
have to anticipate what people are going to be doing,
customers competitors, suppliers.
And so there will be competition if it's a good market.
In fact, there is this process that makes your start-up better
than hearing good answers along the way all the time.
Entrepreneurs hate yes man, yes people.
They want to know either something is great
or why it's not great.
They don't want an answer.
It's OK.
It's fine, because there's nothing actionable in that.
If my product isn't great, I want
you to tell me why it's not great.
Because I'm going to give my heart and soul
to this company for six years, maybe more.
And I'm going to do that with a game plan that's going to win,
not a game plan that's eh.
We're going to win the championship here.
We're going to dominate markets.
We're going to create new markets.
That's what this is all about.