What’s your differentiator?
This is a modest question loaded with the possibility of failure if not answered correctly. What makes you different than your competition? Do you know your competition? You do have competition, right?
So here’s why you need both a differentiator AND competitors.
Your competitor has forged the road before you did, they’ve been through the bumps and now they sit successful, a beacon that your industry is not only relevant, but has a client base willing to invest in it.
Now, your differentiator tells VCs (and this is what it’s all about), that you’re not just a clone. That you’ve modified a service or product because you’ve seen (and done research) on a need, a new path.
These two combined tell VCs:
- You’ve done your homework, you know your competition
- The market has been validated by your competitor
- That you’ve innovated for a reason
- That you know why you’re different and you have a specific reason
Let’s talk competitors
Their is a model within the business world that extremely favourable 20 years ago. In fact, it was adopted by many small businesses, and the general feeling was that it not only made sense, but helped your chances of success. It’s commonly known as the Scarcity Model, and it’s raison d’etre was simply this, ‘Keep your cards close to your chest and don’t trust your competitors’.
Your competitors will steal your ideas, and you shouldn’t engage with them. They are, essentially, the enemy. There were those who believed otherwise, those who created success by embracing their competitors, by seeing a bigger picture than the fishbowl they called home. Fortunately for many of us in the early stages of the 21st Century, the startup revolution began, and with it, the idea that ’No man is an island’
Here in Calgary, we have a local brewery called Village Brewery, and their motto is quite clever, ‘It takes a Village’. We absolutely love that kind of thinking. These guys have involved themselves into the community fiercely. They’ve supported publicly the expansion of the micro-brewery evolution that we’ve all seen across the country, lauding the efforts of Toolshed Brewery and the likes for their involvement. Showing such support for what many consider your competition says a few things publicly. It says you’re confident, that you’r path is strong and you don’t fear something as simple as another similar business. It tells the public that you’re not an island, which is cardinal sin in the startup world. We understand extremely well the need for a strong community to help us, and to avoid that is tantamount to stating you don’t need anyone, you’re just too damn cool for school.