George is the only business mentor I have, but he’s actually more like a great friend. We first met when he approached me through a Craigslist ad I posted offering dance lessons. He had two left feet and immediately took a liking to me. About two years ago, I remember we were sitting down having a conversation at a startup neighborhood Thai restaurant. I had some ventures I was considering pursuing, and I threw them along with my concerns to him.
With my dance business, I told him that there was competition out there, and that their products looked very good.
He emphatically responded, “Don’t worry about the competition. It doesn’t exist.”
He pointed out that I was a good teacher, that I really walked (or danced) my talk, and that I had something special going for me. I tried really hard to believe him, but as a fledgling entrepreneur, I reserved some skepticism.
Continuing on with his own experiences from his successful business, George related to me how most of his fears never came to pass. The competition never invaded on his share of the pie. The competition never really stole his ideas.
In fact, the competition never materialized.
George continued: “It’s funny. My business partner and I were talking about our company the other day. We have a bizarre business, but what we do is very simple. If you took some time to go through our most popular web pages, you’ll know exactly what we do and probably could replicate it. And yet, over the years, no one has tried doing what we do.”
Here are some more tips from George, along with some of my own reflections:
1. Share Your Ideas With Smart People.
Most people new to business are very protective of their ideas. They’re too worried about people stealing them. My advice is to share them with smart people, people who are in business. When you share your ideas with successful entrepreneurs, almost all of the time they’re too busy with their own good ideas to steal yours. Even better, they’re neutral. Their feedback includes a list of reasons why your ideas are good, and some reasons why they are bad.
Don’t share your ideas with people who aren’t in business. They’re useless. They’ll just tell you how someone else is doing it and kill your idea before it even hatches when in fact you might be onto something very good.
2. Avoid Saturated Markets, But They May Not Be As Overcrowded As You Think.
If you have an idea for a restaurant, then you’re screwed. Barring that, most people close themselves to opportunities by glancing at the competition and thinking it’s too crowded outright. They never take the time to sit down for a few hours and really research the competition – they might end up seeing a niche they can fit into. Take the time to research and test the market. There are many ways to test the market without investing too much money. Restaurants are bad ideas because they require too much capital and have high overhead costs.
True, the neighborhood Thai restaurant we sat in was a struggling startup. They were competing with the nearby Thai restaurants with lower prices, but the margins in restaurant businesses are really thin. George did the math, and calculated that after their costs, their net profits (if any) were coming only out of the tips. We tipped generously and wished them the best.
With one of my businesses that I started, I looked at the competition on Google searches, and realized there weren’t many competitors. This gave me the push to fire up a website. However, as I understood Google Adwords more a year later, I noticed that when I ran searches in Canada, only targeted Canadian ads were showing up. When I did a search through a proxy in the US, I discovered that there was much more competition, but my site was already up and running and turning a decent profit.
Had I had known about the US competition beforehand, I probably wouldn’t have created the website.
On dry testing, Timothy Ferriss outlines some methods, particularly dry testing, in The 4-Hour Workweek. George has his own methods, which I’ll share in a later post.
3. Keep a List Of Ideas
George: Put your ideas on paper and list them. Then implement them one by one.
Me: I use my phone instead, but I will literally stop everything to get a good idea down. If I’m driving, I will pull over and type it in. If I’m having sex, I will tell my partner to remember the idea so it doubles my chances of remembering it later. This blog already has enough pre-written material to fill a book!
4. Take Action Because No One Else Is
George: Most people talk. Few will ever do. Most people simply live their lives on autopilot. The biggest problem for an entrepreneur is the lack of quality resources to implement an idea they have.
Me: I can’t count the number of times I’ve heard someone come up with a great idea over a meal and have it end before dessert. Anyone who takes action is bound to get a result, most likely a good one. The concept of taking action is so personal and such a meaty topic to me, that I won’t start writing about it in this blog post or else it will become a long essay.
5. When The Competition Does Play, It’s OK And Can Be Good.
Long ago, one of my competitors squatted on a domain I forgot to buy, and I panicked. Eight years later, he’s still squatting on it, paying for the domain every year, and has done absolutely nothing with it.
With my dance business, the same thing happened. I didn’t believe people would be so tricky, but lo and behold, the competition bought out the domain name for one of my products before I did and forwarded it to their website. The result? I was forced to rename my product to something that was closer to their domain name and got better results. More important than that, knowing that there was active competition forced me to raise the bar higher, to not stay comfortable, and to venture out into new territory.
As a result, I’m improving parts of my original DVDs to create a definitively solid product. I’m also developing new product lines I never thought of before. I have to thank the competition, because they’ve helped me to create a brand.