How To Defend Your Business When You Disrupt A Market

Ahmed Haider with joint venture partner Matthew Sweeny.

There’s a startup born every minute and big businesses, for the most part, don’t care. But when a startup starts to make waves, that little business should be ready to defend their hard-won piece of the market.

Imagine a big pie representing the total revenue available across all industries where each slice of the pie symbolises an industry. When you create a disruptive business, you shift that piece of the pie from the incumbents to yourself.

This occurs even with super innovative ideas like electric cars or space mining: electric cars disrupt traditional car companies and oil companies, and space mining disrupts traditional resource mining companies. Unsurprisingly, disruption pisses off the market leaders.

If you’re lucky enough to be in the position of disruptor, you’re going to cop some heat.

I say ‘lucky’, not because you’re about to inundated with corporate barbs from companies trying to defend their diminishing patch, but because being noticed in this manner means you must be doing something good. It means customers are flocking to you because you are doing the right thing by the market. It means someone else is losing out—and they don’t like it.

Drawing heat

If you’re hitting a nerve within the industry, it means you’re getting noticed because you’re being recognised as a contender. If your customers are the same, then it means you’re competing, and businesses will always be possessive about their market.

I’m reminded of a quote by Mahatma Gandhi: “First they ignore you, then they laugh at you, then they fight you, then you win.” Worse than being disruptive and having people mad at you is being unnoticed because no one cares.

Ghandi’s cycle has happened for us. Initially, the large players ignored us because we were small fries and they didn’t care about what we were doing.

As soon as we had some traction, however, they started to mock us and our business model because they believed it would never work. We just kept quietly working on it and bringing on board more and more customers.

When this started to hurt their revenue, they tried to crush us by copying our business model but by then it was too late, we were already playing a different game to them and we were already on a winning streak.

Strategic defence

Don’t outright ignore your competition when you start drawing heat because how they treat you in ‘battle’ can inform some of your strategy, for example where they perceive your weaknesses to be (which may be different to where you see yours!).

On the flip side, be careful not to focus on your competition too much because all that will do is draw you into a rivalry that will sap your time and energy—time and energy better spent on improving your business.

The thing to remember is that your goal is not to score points off your competitors in a corporate brawl but to win by being the business that pleases the most customers by being the one that serves the market best.

Without customers, you have no arsenal and yes, the big guys will eventually leave you alone, but only because you’re no longer a threat to them. Being a threat is a good thing.

Have confidence in your attack

The easiest way to deal with the heat is to truly believe in what you do and for whom. There’s only one group of people that can get the CEO fired, dump the board and shut down your company and it isn’t your competition. Your customers, by choosing to shop elsewhere, have the power to bring down your business.

If larger businesses start actively competing with you, focus on the customer, the real goal, and make sure you provide a much better experience than other companies. If you are obsessed with your competition, or what other people in the industry are doing, you are probably not the market leader and will never be.

When large companies see you as genuine competition, particularly when you are a startup, take it as a badge of honour. As Winston Churchill once said: “You have enemies? Good. That means you’ve stood up for something, sometime in your life.”

Ahmed Haider is the CEO and cofounder of Zookal, a student portal that offers textbook rentals, digital notes and internships to Australian students.

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