For many technology executives and entrepreneurs, a crowded market can feel daunting, especially when there are many new entrants with backing from venture capital firms.
But if I’ve learned anything from my decades of experience in the tech industry, it’s that a surplus of emerging competitors isn’t necessarily a bad thing.
In fact, as I explain below, leaders at established tech firms should view the arrival of well-funded new kids on the block as a positive development.
Just as a skilled martial arts master knows how to use the power of an opponent to defeat an adversary, you too can harness the power of your new competitors to ensure your company's success.
Purity of Vision
At Infinite Convergence, we’re no strangers to competing in a crowded tech sector. As a long-time leader in mobile messaging and next-gen wireless technologies, we do business in an industry that is chock-full of new companies trying to convert investment dollars into market share.
When such firms enter your space, I know how tempting it can be to reshuffle the deck and change your organization’s focus to respond to new competitors. But in reality, that’s probably the worst thing you can do.
Here’s why: To succeed in the tech industry (or any industry, for that matter), you need purity of vision and focus. If your organization lacks focus or constantly pivots to respond to the competition, you can easily distort your product, undermine your vision and dilute your value proposition.
That’s a problem because at the end of the day, your business exists to create value. By maintaining a pure vision and staying the course in a crowded market, you can protect your ability to generate value for your customers, employees and shareholders.
Does that mean your value proposition should never change? Not at all. But when you shift your focus or modify your value proposition, it should be calibrated to the needs of your customers and the market itself – not based on the latest news coming out of the startup buzz.
At Infinite Convergence, we’ve seen the impact that a clear vision can have in the tech sector. By remaining laser-focused on generating value to enterprise customers through best-in-class mobile messaging and wireless solutions, we’ve continued to thrive in a dynamic and highly competitive space.
Reaping the rewards of purity of vision, we now deliver trillions of messages globally to 500 million subscribers. We've earned the stature of market leaders principally because we remained focused and stayed true to our vision and did not chase every "bright, shiny object" that tech upstarts were hyping via their PR engines.
When we change course, it's because of what our customers tell us they need and are willing to pay for or because we know the market so well that we know where it is headed. That's not something every competitor can do.
The Benefits of Competing in a Crowded Tech Market
Other tech companies facing tough new competition can learn from our experience.
Indeed, assuming you maintain clarity of vision, new entrants in your niche can actually accelerate your success. Here's how it often plays out:
- More Efficient Market Evangelization – Emerging and well-funded companies spend a lot of money to evangelize market need. But in most cases, the fruits of their efforts aren’t limited to customer acquisition at their companies. The dollars new entrants invest in evangelizing the market can also benefit your business – especially if you continue to emphasize your vision and position yourself as a proven presence in the space. Let them spend massive sums on marketing and then you, with a better track record and a more mature offering, can swoop in and grab the customers.
- Talent and Intellectual Property Acquisition Opportunities – In the tech sector, VC-backed companies face constant pressure to quickly deliver results. While established companies can take a more structured approach to executing on a vision that really works, patience is a luxury that emerging competitors simply can’t afford. As a result, they will quickly "pivot" when things don't work fast enough to satisfy the investors. These pivots are effectively a "we give up" admission of failure that puts them back to the starting gates of the race, more desperate than ever. It's no surprise then that many new entrants that launch with much fanfare will ultimately fold up shop. When they do, you can hire away their talented staff and purchase any intellectual property they've created, often at a bargain.
- An Enemy to Rally Against – Play your cards wrong and your troops will be demoralized by the new big-talking competitor that is grabbing the media limelight with their promises of future greatness. Instead, use the competition to motivate your team. Without a worthy adversary, none of us does our best work. In this situation, my message to my team is effectively this: "They think they are better than us. They are coming into our domain to eat our lunch. Are we going to let that happen or are we going to go out there and kick some ass?" I can assure you that most humans will rally to that challenge and perform at levels they did not previously realize were possible.
- Greater Perceived Value – Last but not lease, remember that VC money only follows big opportunities. When venture capital firms back your competitors, it's an endorsement of the long-term potential of the market you operate in. When new entrants raise money at outsized valuations, your valuation rises too, provided that the market is large enough and growing fast enough for you to keep and grow your market share, as we are doing at Infinite Convergence. In other words, if you decide to go to the market for funding or if you decide to pursue an exit strategy, the outcome will be better for you – and that will be a direct result of the VC activity and the young new startup entrants in your niche.
For all of the reasons, I've outlined above, it should be clear that there's a big silver lining to running a tech venture in a crowded market.
The Role of Venture Capital
Finally, I think it’s important to note that venture capital isn’t an inherently bad thing. I actually believe venture funding is a key enabler of innovation that essentially acts as an important catalyst in the economy’s growth. Abundant availability of VC funding at all levels of a company’s evolution (early stage to late stage) have delivered successes like Google, Facebook, Apple and many others.
In fact, it’s not uncommon for even established providers to sometimes pursue relationships with VCs as a way to expand their industry connections and forge relationships with other technology firms. I am very open to this concept. In my experience, an established player, one with purity of vision and deep ambition, can use the funding much more effectively than a new entrant.
The big picture here is that the tech sector is one of the most exciting industries in the global economy. But it can also be a nerve-wracking industry for organizations that are struggling to keep up with new firms.
By maintaining focus and a pure vision, you can effectively compete in an industry where new, highly funded market entrants are a daily occurrence. You can enjoy the silver lining of a crowded market. That’s what we’re doing at Infinite Convergence, and I hope that’s what your company is doing, too.