Growing up, I remember the best days of summer being the days where my little brother and I would scrape together the limited materials we had and set up our very own lemonade stand at the end of our never ending driveway.
We would post up in mini camping chairs our dad bought for us and our mom would mix up our secret recipe of lemonade — Country Time Lemonade mix (only the best for our customers.) We’d drag out our plastic play-kitchen table to the end of our driveway and pour a minimum amount of lemonade in some cups and start yelling, “free lemonade!” The thought of charging anything never crossed our minds, but my mom would call our family members to drive over and buy our little cups of lemonade for 25 cents. Profits were booming back then.
To give some context to this situation, I come from a small town in Macomb County, Michigan, called Armada. We have a gas station, a small grocery store and some family-owned businesses. Ever heard of Blake’s Apple Orchard? That’s us! Anyway, we had the perfect conditions for our little monopoly of a business. I lived two miles down a dirt road and there was no way our lemonade business was going to experience any sort of competition because there was no one around to do so.
I recently listened to an interview with Whitney Wolfe, founder of the dating app Bumble, and learned many great takeaways in the world of competition. A great point she makes is certainly a group of talented engineers could duplicate the app, but what they can’t take is its brand. Bumble aims to completely restructure how men and women feel and the brand is something the founder holds near and dear to her heart— it’s personal.
The brand that my brother and I seemed to build with our make-shift lemonade stand was somewhere in between, the “innocence of childhood” and “look how bored they are let’s stop by.” Anyone in Armada could have built a lemonade stand, but it was our brand we were representing that differentiated us from the rest. That is a point that is important to keep in mind when talking about startups.
Another aspect of competition branches from the depths of a concept I once learned called centrifugal diversification. The concept delves into the tastes for specific media diets people now crave. After the creation of cable television, media became more and more tailored to people’s specific interests and needs, providing selective communication.
This concept made me think of the Recode Media interview with Bleacher Report CEO Dave Finocchio. In it he talks about the inclusiveness of sports culture and how people receive its coverage is changing. Initially, many found out game scores from their local news. However, centrifugal diversification now allows them to choose which platforms work best for them.
Bleacher Report found there was 15 times more engagement from users on Instagram than were was for Facebook. Each platform may satisfy different needs of the user. Facebook may allow you to read and write more, while Instagram is especially flattering to those more visually inclined people. An interesting point that was made about Snapchat was it’s especially unique and concentrated audience of young teens. Each platform has its own qualities and upsides, which in turn, attract their own audiences. All of the platforms are in competition for users, but indirectly because each user seeks a different aspect from each platform.
While each platform is unique, it is important to know how to stand out on each one.
These thoughts and ideas on competition all file into a reading called, How to Write a Great Business: Competitive Analysis. Whether your competition may not be direct, or in your same geographic location, there are still other businesses that can disrupt the market you are in. A competitive analysis allows for you to tell your audience not what your business can do, but why they need it. As stated in the article, it can answer the “against who?” question in order to differentiate yourself from the rest. This can also allow you to asses the strengths and weaknesses of the business, as discussed in Roadmap to Digital Media Starups that helps you plan long-term.
Competition does not always have to be negative. It can be the fuel behind your success if you know how to prepare for it. Even though my lemonade stand wasn’t threatened by competition, our brand we didn’t even know we had become our greatest asset in the lemonade business. Build your brand and let the world know why they need it.