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Competition is no Validation!

How do you Beat the Market When You Make it Big & Competition is the Main Driver of Blitzscaling.

We all think competition is the validation of the market and need within it and the identity of the product/market fit in the value creation cycle. Building a product is just the beginning of the journey, as there is a lot more to building the business rather than just simply launching a product. You have scale fast and preserve capital as well as always staying determined, flexible, ambitious, and humble. There are a lot of variables to juggle in this ever-changing environment so preserving a grounded outlook and an objective eye is key.

I've made many mistakes and experienced a lot of failures in my career - the same lesson comes out every time: the only constant in life is that it always changes. With this in mind, it is important to build a skill set for analyzing mistakes, learning from them, and adjusting so you can try again so you can grow both personally and professionally. After a failure you ask yourself many questions: Could I have found more reliable partners? More diligent employees? Found a better product/market fit? Controlled and predicted cash-flow and funding more? Most importantly, had I thought through every decision I had taken? The world isn’t perfect. We have to be optimistic while also motivating the stakeholders and project future prosperity all while analyzing both our weaknesses and competitors’ strengths.

There is always a risk and reward ratio you are to keep in mind for every decision you take either emotionally or numerically but every decision made must keep the ratio in mine. It sounds easier said than done to act upon a certain strategy as there are multiple various factors to take into account at every stage of the company be it the founder’s character, industry, timing, growth plan, balance sheet, partner risk, etc.

Communication and the culture within the team are key - especially viable now in the time of uncertainty, shock and shifting variables. The economy will keep shifting to value-add services and raise margin production to enable global marketplaces (AppStore, Amazon, Google, etc) to strengthen their position even further. Therefore, it’s important for small newcomers to tackle niche markets and dominate them rather than fighting for a share in a larger more open market.

Therefore, speed and market acquisition in a small domain is your competitive advantage. Do not get into the trap constantly cleaning the house, make sure 98% of the organization is serving the clients not busy with internal problems. Delegate and concentrate on key end-customer value, add services to gain trust, and facilitate future value growth as oppose to getting distracting with internal cost optimization, restructuring, process definition, documenting, etc. Whatever we do, luck is always integral and brings lots of other factors to follow. Living your life true to your beliefs, preserve the family/work balance, and having a purpose will strengthen your “gut feeling” and unveil some new value within your current endeavours.

In any startup, the lifecycle founder must be open to evaluate weaknesses and work on them to mitigate the risk as well as further understand the society and its behaviour. ‘Adapt fast or die trying’ should be the mantra for any product development especially in consumer-centric niches. The world is very fast-paced, and the attention span is too short to ignore changing trends and behaviour. The best course of action is capturing value, identifying competition, trying to "monopolize" the market all while starting small and owning the dedicated niche.

The dynamics of today’s digital society are pushing founders to innovate not replicate as every moment in technology happens only once. Its easy to see value in retrospect as Zuckerberg created Facebook or Sergey Brin created Google, but history does not repeat itself and therefore the only constant in the modern world is change. The culture, vision, and processes must be agile to provide value to the fast-changing needs of the consumer.

When we compare successful and unsuccessful companies, we identify all successful companies are different in their own way while doing something unique, but most unsuccessful companies are remarkably alike doing something similar that is not working. While proprietary technology can give you leverage on the incumbents and existing big competitors due to speed and hyper-targeted product/market fit the offering, smart revenue model, social loyalty, and UI can be an even better differentiator and enabler of "network effects". Word of a mouth and other “cost-effective” marketing techniques are unbelievably valuable but incredibly difficult to initiate as they require a large economy of scale and customer engaging techniques.

Looking back into the history of innovation and comparing today’s monopolies to the past, we can rationalize starting and riving the company in a small niche market to create X dollars of value and capturing the Y % of the market rather than fighting in the large segment to compete away all the innovation. Statistically, 85% of economical value comes in years very far in the future, therefore growth rates (i.e. measured and tracked now) as the basis of the company’s future value are exaggerated. In this case, if the business doesn’t lead for 10+ years, it’s not currently creating value for shareholders but pushing tremendous innovation while nobody makes any money. When the market is too small and hyper-competitive you must spend a lot of energy-enhancing cutting corners and hyper-refining the core product, this makes the battles so precocious as the stakes are so small.

"You want to be a monopoly in the small market rather than a small player in the big one."

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