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Competition Is Good (Even on the Internet)

November 27, 2011

In a previous post I mentioned how people like to remind me that there are lots of other online music businesses. Here’s some of the things they tell me when I talk about my dreams for Jamseed.

“Didn’t Radiohead already do this?”

“Isn’t Myspace [Facebook, Slice the Pie, Sellaband, Qbit, some other site they’ve heard of] already doing this?”

“I heard the guy from Napster did that and it failed.”

Competition, clearly, scares people. It scares them so much that they are afraid of a third-party (me) daring to upset their closely held belief that if someone, somewhere, is (or has) done something remotely similar, then it’s best to go back to my day job cubicle. “It’s been done,” they tell me. “Give it up.”

My response: How many places sell hamburgers?

Consider the Shake Shack in Union Square Park in New York City. It’s in sight of 2 McDonalds, 10 lunch counters, and a minute walk from nearly a hundred restaurants. However, since they opened in 2004, the line stretches out of the park every lunch time.

“But this is the Internet,” the worriers say. “On the Internet only one company can rule.”

Then how come there are so many companies offering email, web hosting, search, credit card processing, appliances, cat toys, book shopping, etc.?

What’s at the heart of the worriers argument is that there’s no point in entering a market if you can’t be number one (on day one). In other words, Barnes and Noble, Powells, and the hundred other online book sellers should just let Amazon win.

But, why should they give up? The history of business is full of upstarts taking over (Google, Microsoft), or companies profitably occupying a niche (like the place I bought a $300 cat tree from).

Competition simply means there’s a market. And where there’s a market, there’s customers. And where there’s customers, there’s a shot a success.

Let the worriers stay home.

David Silverman

David Silverman has had ten careers so far, including entrepreneur, executive, and business writing professor. He is the author of Typo: The Last American Typesetter or How I Made and Lost 4 Million Dollars and of the April 2011 HBR article, Synthesis: Constructive Confessions.

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