Draft Your Competition
Wednesday, April 1, 2009
If you want to learn how to race with the big boys, watch NASCAR.
In NASCAR racing, each car leading another is the first to encounter and break through air resistance. As they do this, they create a pocket of air to the sides and just behind their car that pulls along any car willing to ride right behind. By drafting the car in front of it, the tailing car conserves fuel and power so that at the critical moment, they can pull to the side, punch the acceleration and rocket ahead.
You need to learn how to “draft” your competition to take advantage of their lead until you are ready to pull ahead.
Play Follow the Leader
Let’s say you have a brilliant idea for a new product or service area your company can exploit. After doing a little digging you find that plenty of other smart people just like you have had the same idea – and have already launched companies to take advantage of this opportunity. How do you use their first-mover advantage against them?
Remember that being the first requires far more energy and risk than being the second. There are plenty of corporate tombstones to remind us what happens when the leading company gets drafted by the next competitor on the block. Anyone remember Netscape (RIP)? Even though it wasn’t exactly intentional, Microsoft let Netscape bear the burden of being the first to market – finding out that there really isn’t a revenue model in giving software away for free. As such, they were able to enter the market much more efficiently by baking their product, Internet Explorer, directly into the Operating System.
There is also a good deal of risk your competition assumes by riding out in front. If they roll out a new feature and it bombs with the customers, they’re the ones that have to absorb the cost. If they’re introducing a service to an unproven market, it’ll be their bottom line that takes the hit if it goes bust. Let your competition take the immediate hits and focus your attention on capitalizing on the wins that they find by quickly introducing your product right behind it.
Getting to the Next In Line
The first step in business drafting is to take a baseline inventory of the competition’s offering. If you even want a shot at making their customers your own, you’ll need to make sure you’re taking them something comparable.
You’ll surely find that investigating your competition gives you great ideas for ways to enhance your own products. But remember, the point of drafting is to conserve your own energy by just keeping pace. Anything your competitors aren’t offering will give you an advantage later but isn’t a requirement to be a contender right now.
Once you have your baseline list, you’re ready to pull into position. To do so, you’re going to have to make some choices about the priority of your baseline features. While this baseline gives you a great to do list, you still have to decide what you can accomplish with the resources you have available. Also, just because your competition is doing something, it doesn’t mean that it’s so important to your customers.
Your single best source for evaluating baseline features is your customers. If they don’t need it, neither do you. This is a clear disadvantage to your competitors because while you keep energy in reserve by not implementing an unneeded feature, they get none back by removing it.
Pull Out Ahead
After you’ve dropped unneeded features and prioritized the remaining ones, you’ll be sitting behind your nearest competitor with a full tank of gas and ready to put the pedal to the metal.
Remember all of those ideas you had about your competitor’s shortcomings and all of those suggestions the customers gave you? These are the new features that you implement with your reserves to catapult you around the business you’ve been drafting. You’ll use this strategy to climb feature-by-feature, customer-by-customer all the way to the front of the pack.
Your most important move will be the one that puts you out in front of the competition. You’ll be the one encountering all of the front-end resistance and risk, and if you don’t put enough distance behind you, you’ll be the one that’s drafted.
Cross the Finish Line
Now that you’ve pulled out to the front of the pack and crossed the finish line you’ve won, right? Not exactly.
In business there is always another race to be won. Once again you’re at the end of another line and it’s time to draft your way up to the lead position. This time you know the drill. You know you need to conserve your energy and only pull ahead when the time is right.
And don’t forget to look back, either. Your competition is quickly trying to figure out their own drafting strategy, but for now, it’s time for them to eat your dust.