When you plan your competitive advantage, focus on learning the system and the grand strategies first, not on your competitors. They are the last thing you should worry about.
One modest business advice that is being given very often to startup founders, small business owners, young and first-time entrepreneurs is to focus the planning their competitive advantage of their business on analyzing their competitors.
While you naturally need to do this at one point in your business planning, this is far from being your point A in this process.
It is fundamental logic, common sense I’d say: you don’t win a game by knowing your opponents first, but by knowing the rules of the game and the game designers’ strategies. Analyzing your competitors without understanding well enough the arena’s mechanism won’t take you too far, the main reason for such high and fast failure rates in the entrepreneurship world.
“You have to learn the rules of the game. And then you have to play better than anyone else.” – Albert Einstein
The world is the ocean, your country is the sea, a big(ger) business is a boat, but your new or small business is a raft.
A talent strategist knows from early beginnings at what moments in the business problems may appear and what kind of problems, even if at the moment of the strategy design s/he does not know precisely how s/he will handle them when the time comes.
To survive, you always need to know where the wind blows, where to find resources, where to find solutions for your present and future problems and challenges, and how the basic market flow works, overall. It is this kind of practical education that you need as an entrepreneur to break through. If you are the proud owner of an internet connection and a mobile/tablet/laptop, you can reach it for free because all of it is public information. By public I mean on public authorities websites.
Everything else is (almost) useless theory and while it is nice and cool to study it at a fancy school, you don’t need it in the first years of your business, you will only need it after a certain growth point. In the first years, all you need is a strong commitment, an open mind and a smart learning approach, something that naturally leads to smart business planning and strategy, eventually to reaching from point A to point B in your terms and in due time with your given resources.
Smart learning is that kind of learning that instantly sets you for action, that gives you execution precision and an exceptionally good orientation in time and space, that makes you a good navigator. It is not theory. It is pure action, the kind that automatically makes you a better strategist and operational performer.
I asked once on Quora “What is the fastest way to develop a strategic mindset?” and the most common answer offered by worldwide business advisors was Read the Art of War by Sun Tzu. Well, I wish you good luck with that. It is a good and revelatory read in many ways, but it is not practical enough for the business world. It has its force, though, in times of crisis and from one certain point forward. However, one must understand that behind such powerful simplicity there is a lifetime filled with action.
There are 3 basic directions you need to approach in the space you want to carry out your business:
- The legal frame
- The moral frame
- The grand strategies (national, regional, global)
Let’s dive into it a bit:
3. Know the grand strategies
What helps you develop fast a strategic mindset and do an excellent job in the planning your competitive advantage process (not fast, but in real-time!) is reading strategies. Not any strategies. You must begin with reading national strategies, especially the ones related to your sector of activity/industry.
From there, you will be naturally led to everything else that is vital for your business and for market understanding: statistics, regional/global strategies, tax incentives schemes and funding programs/venues, and so on. They are all at sight on public authorities’ websites.
It is just like becoming a great film script writer: read loads of scripts and write loads of scripts. It is the most direct and effective way to learn in applicable ways. It crystallizes and structures your mind, it refines your thinking, it shapes your skills and it sets you for action.
In filmmaking there is a saying: “To make a good movie, you need 3 things: script, script and script”. Your life and business strategy is your script. Download from web and read (for your curiosity but take it also as a challenge) the script of your favorite movie to see how it all started. Then make a step forward and see how they turned flying ideas into a tangible and often profitable product and business. You will notice that around many movies there is an entire industry developed, an entire ecosystem.
Doing a film is not about having an idea, but about making any idea work. The same principle applies with high fidelity to business.
Give the same amount of resources and idea to 10 entrepreneurs. After all stats and probabilities, 1 will succeed, 9 will fail. 80% will fail by the end of their first year, while less than 50% reach their third year. Why do you think that happens?
Why do you think investors and business angels get involved in so many businesses during startup accelerators and all sorts of such events? Because it’s a calculated bet game. They know most of the businesses they invest in will fail, but some will do ok and hopefully, one will also be the unicorn they are after. Unicorns are rate, but often, it is not an original idea that becomes a unicorn, but an original way to implement common or obvious ideas. It all goes down to your X Factor. That’s the core of any business you’ll get yourself into, manage and lead. Everything else derives from it.
When you are small, and when you work with law budgets and resources, the only chance you have to succeed is to operate with precision. Precision is given by knowledge and by execution (practice). In its optimal form, it turns into simplicity.
1. Know the legal frame
The legal frame is not the laws that govern your business field, it is the Constitution. That is the starting point. The root. The Constitution is the ‘Strategy” that gives the core directions and principles of the entire legal system of any country.
The next in line must read are the Codes: fiscal, labor, family, education, R&D and Innovation etc. The Codes are the Bibles.
Then, you go into the laws connected with your business field. The laws are the Instruction Manuals.
These reads will save you a lot of time and money. Specialists in the field (like accountants, lawyers etc) operate like judges in the court of law: they only give you what you ask. No more, no less. It’s a universal principle. Especially if you are small and don’t have resources to hire your exclusive top specialists. They will never tell you what opportunities there are, how to get access to them and how to best carry out your business.
They won’t offer you the business coaching that you need, because this is not their business.
You must know what questions to ask during the consulting hours you are paying for to get the most and the best out of it. To know that, you must first know what exists out there. The rest is details and that is what we hire specialists for.
This kind of knowledge gives you a platinum key in the competitive advantage area, at all stages of your business.
2. Know the moral frame
If you want to run a business in a Christian space, you must know the Spiritual Strategy/Guidelines that run in the air and in the unseen of that space. Read the Bible. Always with an emptied mind of prejudice and judgement. Read it as if you are hungry for the truth. Not your truth, not their truth, but the truth. Even if the world aspires to become more spiritual than religious, religion influenced a lot the genetics of that space, it is in the DNA, in the way people think, believe and act.
If you want to run a business in a Muslim or Buddhist space, do the same. The principle applies no matter the name of the religion and spiritual beliefs.
Then start learning about the culture, history and traditions of the place.
Most of the business owners don’t even know the basics of the space they were born in. This blank space in their knowledge influences failure and success more than one may think.
This knowledge broadens your horizons, helps you to naturally connect emotionally with local partners and customers, but above all, it protects you from isolating thinking and from self-sufficiency. It connects your world to the world. This basic connection is vital for your business success. It also makes you a better leader and person.
Now, you can start analyzing your competitors.
On the timeline, your competitors are of two types and you must investigate both:
- The ones of the past: who played this game before and/or until yesterday. Why are not they here anymore? What happened? How the market evolved?
- The ones of the present: who are already there and way ahead of you.
From globalization perspective, you competitors are everywhere:
- Global (through online environment)
From their size perspective, there are:
- Crowds of smaller competitors
- Big fishes
- Giant dragons
Your competing strategies cannot be the same for all as if there’s one grand competitor called “The Competition”.
But don’t worry, by following these steps in this order, you will naturally understand and know how to do things, how to position, how to refine your thinking and strategy on nuances and chapters.
It might sound a lot, but when start doing it, you will realize the basics are not so much as it seems. It takes focused time for research, reading and taking notes.
Learning to design and structure a strategy is a detail. The web is full of templates. But at the end of this process, you will start to design your own strategies in the most customized ways for your business.
Another thing that will prove vital in planning your competitive advantage is the Field. Testing, observing and physically interacting with your competitors’ reflections in the market under the form of products, services and client support. It is not enough to just read about it. You need to feel it and investigate it. Similar with learning the Moral Frame, you must do it with an open and curious mind. You need to emotionally understand why people are buying those products/services, how they differ from each other, what messages are hidden in their marketing code and so on.
Then another thing is to analyze your competitors’ leaders and public records (financials, PR, marketing etc). How do they run the business? How the earlier CEOs did it and why and when the changes took place. How did they evolve? How did/do they manage to survive in the hypercompetitive world?
This kind of knowledge will teach you the best from each and will help you to better understand the market where you (want) to run your business, but also how to optimize your products, services and processes.
There are also smaller but vital aspects in planning your competitive advantage like: choosing your suppliers, setting up your team, branding and many more, but these for another chapter.
I promise you that if you place your attention in this chapter, everything else will fall together, everything else will become much more easy, natural and fast to do and understand. You will feel it as a reflex. Your learning won’t be about how to do that and that anymore, but about how to refine and uplift.
To thrive in the mechanism of life and business, we need to learn how to integrate our strategies in the grand strategies and how to connect our world to the world. Our entire life depends on the quality of our performance.
The below short video (8 minutes watch) is part of my video course on Udemy “Patterns for Success. XCulture: How Superheroes Are Born.” – it is the planning your competitive advantage seed chapter. The course is also under the form of a book you can easily find on all Amazon international websites.
XCulture video course has 4 sections: XFactor, Strategy, Leadership and Culture covered by 15 short videos of 5-10 minutes each. Its purpose is not to teach you How To, but to show you Where To Look, because once you realize that, the How To part comes naturally and customized on your own DNA and business domain.
I hope it will inspire and lead you where you want. If so, your review will make me very happy. If you want to directly interact with me, don’t hesitate to reach me out.