People often reject business ideas for a strange reason:
“But other people already do that.”
Usually, that is not evidence against the idea.
It is evidence for it.
If several companies are already selling something similar, that tells you something important:
People pay for it.
The problem exists.
Customers understand the category.
They know roughly what the solution is.
They may already have budget allocated to solving it.
You do not have to convince them that this type of thing should exist.
Compare that with an idea nobody is doing.
That can sound exciting.
“There are no competitors!”
Maybe you have discovered an enormous opportunity that everyone else somehow missed.
Or maybe nobody is doing it because nobody wants it.
And even if customers would want it, you may have to create the market before you can sell the product.
You have to explain the problem.
Then explain why it is worth solving.
Then explain an unfamiliar solution.
Then convince people to change how they currently behave.
Then convince them to pay for it.
That is much harder than saying:
“You already pay for this. Here is a version that is better for you.”
Competition Is Evidence
Imagine you discover ten companies selling bookkeeping services to freelancers.
You could look at that and think:
“Too late. Other people already do it.”
Or you could look at the same information and think:
“Interesting. At least ten businesses have found enough demand here to survive.”
That is useful information.
Now you can study them.
Who do they serve?
What do they charge?
How do they acquire customers?
What do customers love?
What do customers complain about?
Where are they slow?
What do they make unnecessarily complicated?
Which customers do they ignore?
You are starting with evidence instead of a blank sheet of paper.
You Do Not Need to Invent a New Category
You also do not have to make something completely new in order to build a valuable business.
A new business can be:
- for a more specific customer;
- easier to use;
- faster;
- more convenient;
- better designed;
- more specialized;
- more reliable;
- bundled differently;
- delivered differently;
- positioned around a different outcome;
- available in a place or language where the existing solutions are weak.
A general marketing agency and a marketing agency exclusively for dentists might perform many of the same activities.
But they are not necessarily the same offer.
The dentist-focused company can understand the customer better, use relevant examples, develop repeatable processes, speak the customer’s language and build a reputation inside that market.
You did not invent marketing.
You found a better fit between an existing solution and a particular customer.
Do Not Default to Being Cheaper
One of the least interesting ways to differentiate is:
“We’ll do exactly what they do, but charge less.”
Sometimes lower prices make sense.
But if cheapness is your only advantage, someone can usually become cheaper than you.
And low prices can make it harder to provide good service, hire good people, acquire customers and survive mistakes.
Look for differences that customers actually value.
Maybe the competitors require a three-month onboarding process and you can start tomorrow.
Maybe they serve large companies and ignore small ones.
Maybe their software does 200 things and your customer only needs five.
Maybe customers hate dealing with them.
Maybe their product is good but nobody has adapted it to your country.
Maybe the market has changed since the existing companies designed their products.
Competition proves that money is changing hands.
Your job is to understand why customers choose between the available options and whether there is room for another one.
Existing Businesses Give You Something Else: Data
Competitors are not only competition.
They are research.
Their websites show you how they describe the problem.
Their pricing tells you what customers may already be accustomed to paying.
Their reviews show you what customers care about.
Their complaints show you where the current solutions fail.
Their advertising tells you which messages they think are worth paying to distribute.
Their job listings can even tell you what parts of the business are difficult to operate.
You can learn an enormous amount before spending much money yourself.
When nobody is doing anything remotely similar, you have much less evidence.
Sometimes that is where the biggest opportunities are.
But it also means you are making a much larger number of assumptions.
“Nobody Is Doing It” Should Make You Curious, Not Excited
If you find an idea with no competitors, ask why.
Maybe the technology only recently became possible.
Maybe regulation changed.
Maybe customer behavior changed.
Maybe everyone has overlooked an underserved niche.
Those are good answers.
But another possible answer is:
There is no market.
Do not automatically treat the absence of competitors as an advantage.
Likewise, do not automatically treat their presence as a disadvantage.
If people are already successfully selling something similar, you have learned something extremely valuable before doing any work:
Someone wants this badly enough to pay for it.
That is a much better starting point than most ideas have.
You do not need to be the first.
You need to understand the customer well enough to give some of them a reason to choose you.