Never underestimate the competition

This post is inspired by a pointless but interesting little Facebook app I have installed on my profile, Art of War Quotes. Basically the app displays random quotes from Sun Tzu’s, The Art of War. This one particular quote I found interesting.

“He who exercises no forethought but makes light of his opponents is sure to be captured by them.”

This quote got me thinking about business competition and more specifically how this relates when a business is looking to secure investment, using the elevator pitch and beyond.

A common misconception that those seeking investment for the first time have is the strategy of underplaying the strength of their market competition. Logically it makes a lot of sense to sell the investors on the idea that there is little of no competition in the market place, or that existing competition doesn’t pose a significant threat. This may well be the case but more often than not underestimating the competition has the opposite of the effect desired when pitching for investment.

Competition is good

An investor will respect your honesty and you will gain instant credibility if, instead of hiding the strengths of your competition, you focus on how the other players in your industry go about things and how your business will differentiate itself. Having strong competition in your business field can actually be very positive and can go a long way to compensate for any lack of IP. It proves there is a market for your product or service and that other businesses are willing to spend big marketing bucks to capture the target market.

Displaying true insight in to your competition can only be a positive thing when seeking investment.