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Don’t Be an Armchair CEO

Written By: Brian Wang 3 August 2010 Other Posts By: Brian Wang

If there’s something that startup people love to do, it’s to converse, and I’m no exception.  Whether the topic revolves around industry news, a controversial blog post, or brainstorming for ideas, I love a good exchange.  One of my favorite types of discussions involves analyzing a particular company and attempting to explain what it’s doing right and what it’s doing wrong.  These sorts of conversations can be interesting exercises and inspire new ways of thinking.  However, a dangerous pitfall exists for aspiring founders.  While evaluating potential competitors in the ideation phase, it’s easy to fall into the trap of becoming an armchair CEO.  By this I mean behaving as if you are already in competition with an existing company before launching anything.  In my opinion, the most insidious manifestation of this behavior comes about when focusing on flaws and gaps in a competitor’s product.

While competitive analysis is important, one must avoid performing it in a shallow manner.  Fault can be found with anything when viewed from 100,000 feet away.  However, that distance can prevent one from understanding the reasons and logic behind whatever is being criticized.  This is acutely more dangerous for a founder in the pre-execution phase because without building and launching anything into the market, one might assume that they can avoid those same obstacles. It takes no effort to look at a competitor’s shortcoming and say “Oh, that sucks.  We can definitely do that better.”  I’ve often made this statement as if I’ve already got a superior, competing product out there.  That is the height of hubris.  I suspect that the majority of this thinking occurs at the Uninformed Optimism stage of the entrepreneurial Transition Curve.

The good news is that once reality hits, these sorts of arrogant assumptions will likely be swept away.  I recently experienced this in the early stages of a social shopping recommendation my partner and I have been working on.  For a good several weeks we smugly criticized recommendation/advice sites that rely on manually curating their product recommendations.  We figured that building a system that brought in products from various eCommerce sites and integrated it into the recommendation engine would be simple.  It turns out there’s a damn good reason why you don’t see many sites doing that sort of thing.  It’s not easy and made us realize that up until execution, we were just engaging in one big exercise in mental masturbation.

Far more dangerous is the belief that focusing on a competitor’s weaknesses will lead to competitive advantages.  Not only does this lead to the kind of arrogant thinking mentioned above, but it distracts from the true goal.  A startup’s primary goal should be to provide tangible value for its customers.  This mission is muddled because when all you do is focus on the wrong, you lose sight of the right.  One can look at the way many startups built on top of the Twitter platform turned out to see the dangers of being a gap filler.  Taking this approach always has the looming risk of a competitor (or in Twitter’s case, a platform) copying your features and then proceeding to wipe you out.  A feature war is very often a losing battle, but a war waged on a competitor’s gaps is doomed from the start.   Don’t be a ditch-filler; focus on delivering value for users and nothing else.

Summary:

  • Don’t assume that a competitor’s gaps are easy to fill
  • Gap filling is often times a losing battle
  • Focusing on the wrong prevents you from focusing on the right
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  • Tim

    Heh, I don't know if you realize the irony of that summary after mentioning to focus on the positives rather than the negatives.

    If not filling gaps in the market, what SHOULD companies be doing?

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