'Competition Is the Greatest Thing That Can Happen in Business'

By Catherine Clifford

Feeling your competition close in on you is stressful, but it also gets your adrenaline pumping. It makes you focus more intently, and ultimately, pushes you to create a better product. 

“Competition is the greatest thing that can happen in business. It’s the best thing,” said Doreen Lorenzo, the president of consumer-product invention company Quirky, at a panel discussion on the sharing economy in New York City last night. “Otherwise you get stale, you get fat, you get slow.”

The panel featured leading executives from sharing-economy front runners, including the transportation company Uber, accommodation rental service Airbnb, and crowdsourced recruiting company RecruitiFi. It was moderated by Spencer Ante, the co-founder of WhoWeUse, a crowdsourced service referral startup. As the sharing economy expands and grows, so too, has the number of competitors in the space. For example, Uber now shares the ride-hailing technology space with players like Lyft and Sidecar.

Feeling the breath of your competitors on your neck is good for you. In a market without other startups nipping at your heels, you begin to gain a sense of false confidence, Lorenzo says. “The best thing that can happen to you is a competitor enters your space and then you think, ‘Oh, shit, I have got to do something.’”

For entrepreneurs creating a new industry -- one that may even ask consumers to change their behavior -- your competition can also be your teammate in a counterintuitive sort of way, said Wrede Petersmeyer, the New York City manager for Airbnb. Just look at the sharing economy: Not long ago, the idea of sharing a car or an apartment with a stranger would have been seen as odd -- and in many parts of the country, it still is. But more companies entering the space has helped shift that social norm. “Our biggest competition in these sharing economies is not necessarily each other, but the misconceptions about the sharing economy,” said Petersmeyer.

To new, nervous sharing-economy entrepreneurs, Petersmeyer tells them to relax about the competition -- even welcome it. “You need to sort of embrace your competitors. They are out there convincing who you haven’t talked to yet that what you are trying to do is not a weird thing.”

It’s a delicate balance, though. Once you have joined forces with fellow sharing economy entrepreneurs to work to change public perception, then you have to go back to thinking of yourself and making your own product the best available, said Petersmeyer.

As the cliche goes, keep your friends close and your enemies closer.

Culled from: http://www.entrepreneur.com