Don't Compete Against Rivals; Make Them Irrelevant

Image by Steve Rhodesvia Flickr

One of the first "will I invest?" criteria I look for in a start-up business plan is how a new company plans to outfox/outplay/outmaneuver competitors. Surprisingly, it is often an area that is ignored, or detailed with a matrix showing the new offering to be far superior than anything on the market.  That is when I hone in of why the entrepreneur thinks they are going to beat out current rivals.

The beauty of the concept of making rivals irrelevant is that it happens all the time in all industries.  Google, for example, initially took Yahoo, AOL, Microsoft and the rest of them to the cleaners on search.  But the latest statistics show that Facebook is fast becoming a top origination for search on the web.  This is clearly related to the number of people who not only have Facebook as their home page, and then not bother to change pages to originate search.  Should Yahoo and Google be concerned?  They better...

But the reality is that making it happen is much harder than entrepreneurs think.  Here are a few suggestions on how to make your business plan be a competitor destroyer:

1. Get top industry gurus as investors/advisers--having the names of leading angel investors, industry experts, successful entrepreneurs (calling Larry Page!), etc. as supporters of your business not only gives you access to strategic advice about beating competitors but lets potential new investors and partners know that other smart people have vetted your ideas.
2. Detail roll-out plans for your business model--too often, a good idea does not have enough thought process into the "how" of execution. If, for example, you are going to use viral marketing techniques, great, but please explain exactly how these are going to work and how you are going to pilot techniques to test their success. Explain clearly about how these techniques are going to reach your target audience and why they will choose you over a rival--better, more diverse content? easier to use web-based tools?  enhanced social/business networking opportunities?
3. Don't look in the rear view mirror--too often, business plans compete against yesterday's rivals. You have to assume that somewhere out there in the world, another entrepreneur is working on your idea, or one very close to it. They will be your future rivals and your strategies should reflect how they might blunt the advantages your are building into your plan.