Second to Market isn’t Always Second Best
About a year ago, I had the opportunity to hear Paul English, the CTO and Co-Founder of Kayak.com, speak. In his chat, Paul focused a great deal on ruthless efficiency and excellent customer experience. He wowed the crowd with stories of answering his own customer service calls, getting feedback on Kayak’s new iPhone application from strangers in an airport, and diving over desks at Kayak HQ to see who could answer customer complaints first.
After the talk, I explained to Paul that I had spent a month developing a great idea with an even better team, only to find out that Google Ventures had just invested in an identical business. I was clearly dejected and looking for confirmation that I should move on to my next idea. To my surprise, he responded by saying, “So? Do it better!”
In retrospect, I was surprised because I was so accustomed to hearing investors and entrepreneurs harp on questions like: “How are you going to protect that business? What are the barriers to entry? What does your IP look like?” But here was a great entrepreneur sitting in front of me and effectively saying: great execution, not competition, should be an entrepreneur’s (and investor’s) initial focus.
If you agree with this sentiment, then these questions should precede the conversation about competition and defensibility:
Team: Who do you have and who do you need?
Clients: What is your customer-development strategy? How many potential customers have you spoken to and what have they said?
Model: How are you going to service your clients once you have them? Can you provide a great customer experience and still turn a profit? How?
Brand: If everything works out, what will your brand identity be in one year, three years, five years?
If you can come up with satisfactory answers to those questions (no small task), then you will have even more insight into your potential competitors and defensibility. Once you have put together a capable team, with complementary skills, great rapport, and the ability to deliver the core of your offering, I strongly recommend that you check out Steve Blank’s The Four Steps to the Epiphany, and the Entrepreneur’s Guide to Customer Development by Brant Cooper and Patrick Vlaskovits. These books provide a framework with which to test your market assumptions and begin the most effective execution strategy possible—one based on the feedback of your potential customers.
In the end, you will have to take a long look at your competitors, existing and potential, and figure out where your business fits in. If you make a great plan and put together a fantastic team, however, you can proceed with the simple motto: We’ll do it better.