Competitors Who Have Nothing Have Nothing to Lose
Today, because the barriers to entry into almost any business are so low and the costs are so modest, competitors can be in your business and in your face in an instant. And because much of the Web is still very much like the Wild West, prospects and customers have very little accurate information to go on in making their initial choices and evaluations of various products or services.
Website and service validation businesses represent an entirely new and interesting digital marketplace and Stella Service is one of the early leaders in the space trying to become the "Good Housekeeping" seal of approval for e-commerce and other sites. It’s a fertile opportunity and you can bet that he'll have plenty of competition in no time at all.
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But, because the need is a real one, everyone will eventually be much better served and become much smarter decision-makers by virtue of the immediate access they will have to timely and accurate comparative information concerning everything they are thinking about buying, selling, using, visiting or consuming. We’re about to enter the Mocial world.
Mocial is just a mash-up of mobile and social, but what it stands for is a much more complex and important set of ideas and requirements. Mocial means providing: (1) what we need; (2) when we need it; (3) wherever we are; and (4) without asking. Places and spaces will become intelligent and active and they will tell us relevant and particularized “stories” based on who we are, where we are and what we are doing as well as our prior contextual-sensitive activities and histories. Nudge commerce and next-generation suggestive selling systems will make a lot of the basic purchase decisions for us – especially in-store or online. Google Now is an early second-generation entrant into these kinds of services
However, for the moment, as a result of inadequate and poorly distributed marketplace information, false claims and promises, bait and switch offers, and cheap prices are far too prevalent on the Web and unfortunately they’re disproportionately effective for the moment. And even though price and value are two radically different things, it's often very difficult for your company to make your case in the few moments or seconds during which you typically have the buyer's attention.
Worse yet, in today's Costco-fied economy, besides price, uber-size seems to matter most to too many consumers. Measuring bigger is easy. Measuring better is much harder because it requires judgment and values. But it’s not all that clear that most consumers care about long-term value especially given the highly-disposable nature and prompt obsolescence of so many of today’s products and services.
As a result, you can find yourself trying to keep up with and compete against new entrants and other competitors who really have no skin in the game. Having nothing, they have nothing to lose – all they can do is mess up the market for you. And like finding a turd in the punch bowl, once the prices start to spiral down, things only get uglier and less appetizing. There’s really no way back.
This is also why - for a real player - it’s no fun at all to play poker for pennies. Playing for peanuts (or with people with nothing to lose) takes away the pain and pressure of making difficult choices and sacrifices. But even that’s only half the story. The other reason that it’s a waste of time to play for pretend stakes is that there is no real impact outside of the game if you lose. Ultimately nothing is more important to good decision-making than the ability to identify, appreciate and evaluate the costs and consequences of our actions. Not, of course, just at the poker table, but in all our business relationships and in our lives in general as well.
And please don’t buy into this noise about there being room for everyone in the market and that more players just expand the overall market size. Your job is to kill the competition – if they’re about to drown; throw them a nice large anvil to speed the process along. They want your family to starve and your kids to be homeless.
And even if these mopes were worthy competitors instead of low-ball artists, trying to compete on price or sheer quantity - especially for a start-up - is a very tough and risky choice and almost always a bad idea. This is why you don’t wrestle with pigs – you’ll both get dirty, but only the pig will enjoy it.
Not only are there no winners in the race to the lowest price, it actually turns out that, for many of us today, even "free" isn't cheap enough. This is because in many cases the costs of usage and adoption have a lot more to do with the calculated allocation of scarce personal time and precious resources rather than with just dollars and cents. In addition, there are always other and better dimensions to compete on if you’re really doing your job.
So, as tough as it can sometimes be, the best plan is to ignore the guys in the cheap seats and concentrate on making sure that you’re delivering a product or service that’s worth the prices you’re asking your customers to pay. In the end, that’s all that really matters and that’s what will win in the long run.
PP: “You Get What You Work for, Not What You Wish for”
