Competition

David Heinemeier Hansson cuts deep in this post about the dangers of drawing lessons from your own failures. He is commenting on Andrew Wilkinson's post how he blew $10,000,000 of his own money building a to-do list app and then failed in the face of vastly better funded competition. It was all a fascinating read. One of the key themes that DHH surfaces in his comments is the folly of chasing your perceived competition to win a share in some arbitrarily defined market.

"Of course you're going to lose if you define your company and your product on the competition's terms, try to copy whatever they're doing, but don't have half the money to do so."

 There are so many principles one can explore and expand upon here that it practically warrants a book.  Personally, I always felt diminished when I allowed the competition to guide any decisions that I made.  On the other hand, I also took a ton of shit from people for not being more outwardly concerned about what the competition was doing: the central fear being we might be ignoring market signals and being arrogant at the same time. Frankly, I think there is a huge amount of unexplored thinking between: 

 (1) being obsessed with your competition;

 (2) being obsessed with doing your own thing; and

 (3) knowing what game you are playing and why - and then playing it better than anyone. 

Deciding you don't have competitors or that they don't really matter because you are so different or smart or nimble is one of the most common lies founders tell themselves; until it is too late. At the same time, focusing on what everyone else is doing and being sucked into battles that require capabilities you don't have (staying power, brand, global marketing, etc.) is pure hubris and will eventually be punished by the SaaS gods. My quick wisdom here is that both #1 and #2 will generate expensive blind spots unless you really have #3 sorted out.  Knowing what game you should be playing figures into your attitude about competition a great deal. There is a clear difference between trying to become one of the top three most recognized apps in a well-defined space vs building a profitable, sticky, verticalized solution in a quiet corner somewhere. There is a difference between replacing something that already exists with a better mousetrap vs educating a market to do something different. Depending on the approach, you will experience different obstacles, need different levels of investment and be exposed to different competitive forces. I see people mix these games up all the time. Poker and Twister are both games, yet we don’t mix them up - even though they are both played against multiple people, preferably with alcohol and often in wood-panelled basements… I may have gone too far with that analogy.

How you think about competition (and any other obstacle) is tied to how you see the game. When you know what your game is, you can have well-defined goals, develop an ability to identify and understand the real obstacles  and build reliable capability to  work past those obstacles. In my experience, we talk about planning and strategy and BHAGs and the like, but then act like the choice of game is already set and non-negotiable.  It’s not; you get to choose.  In fact, you need to choose.  Leaders pursuing goals should talk more clearly about the game they are choosing to play and why - only then can you figure out what winning or losing actually means.

Dogs Playing Poker, by Cassius Marcellus Coolidge,

refers collectively to an 1894 painting,

a 1903 series of sixteen oil paintings