lift the veil of competition
April 4, 2023
A few years ago, a friend of mine, one of my very first clients, approached me with an idea about starting an apparel company, NIFOM Sportif. He had noticed that most youth sports academies wear apparel from one of the top brands without actually having a contract with them. By and large, when you see a local soccer academy all decked out in their Nike uniforms, for example, they arbitrarily chose Nike and receive no support from them. At best, the biggest academies are able to sign contracts with local distributors affiliated with one of the top brands. Top companies like Nike are benefiting from their incredible brand equity to secure these massive contracts without having to build or nurture relationships with academies.
The idea was for NIFOM to compete with the big brands for this market they have been taking for granted. My friend wanted to build with these academies the same kind of partnership Adidas has with Real Madrid, for example. His strategy was to offer comparable quality at a much lower price. He reasoned that most academies would jump at the opportunity to save a large amount of money on the cost of their apparel.
This strategy had a lot of merit, but it was obvious to me that although a low price strategy might convince academies to jump ship, it would inevitably lead to a price war that NIFOM would likely lose, given the unlimited resources the big players have at their disposal. My work was to help him find a better, more sustainable position.
What the best companies understand about brand strategy that the rest of us often miss, is that positioning isn’t about beating the competition. It’s about creating and bringing to customers a completely new value proposition. It’s a subtle difference, with huge implications.
COMPETITION IS A DISTRACTION
When we compete, business becomes about crushing the competition. It becomes about winning— or at least not losing— by any means necessary. It distracts us from our original visions and our game plans. It makes us lack the clarity needed to make the right decisions in the present and the perspective we need to make long term bets. When we compete, we operate from a position of fear.
Most devastatingly, competition takes our focus away from what matters most: our customers. It forces us to focus less on their needs and on things we can directly impact like high quality, high standards, more efficiency, showing more empathy, being more generous or looking after our employees. Instead, we focus on things that we cannot completely control, like revenue, market share, reputation, competitors and in the case of public companies, stock prices. All of which are merely outcomes of having done well the things within our control.
In the end, competition is a zero sum game, with winners and losers. In Zero to One, a seminal book on entrepreneurship, Peter Thiel argues that there are actually often no winners in competition. The fight for market share often leads to the kind of price wars that NIFOM was headed for, and with shrinking profit margins, no one truly wins.
EMPATHY IS ALMOST ALWAYS THE ANSWER
When we approach positioning with empathy for those we aim to serve, it immediately shifts our focus away from our competitors. Differentiation becomes less about trying to be different from the competition per se, and more about identifying the gaps in the customers' puzzles of needs. This shift from beating the competition to fulfilling our customers’ needs often leads to what W. Chan Kim and Renee Mauborgne call Value Innovation in their incredible book Blue Ocean Strategy. In the book, the authors argue that companies should achieve differentiation by avoiding competition altogether. Companies should focus on offering a completely new value proposition, which often means creating a new market or a new industry-- a Blue Ocean.
In Value Innovation, the focus is put on the customers and their respective needs. It requires that companies map out, holistically, the needs of the people they aim to serve. It forces them to put themselves in the shoes of the customers. In doing so, those companies often reevaluate their industry’s conventional wisdom about what customers value most. More importantly, it forces companies to look for solutions outside of their industry, because the focus is no longer on beating the competition but creating the best possible value for customers.
LIFTING THE VEIL OF COMPETITION: Value Innovation with NIFOM
Everything changed when we moved away from competing and brought a little more empathy into our approach to positioning NIFOM Sportif.
Our work started with defining the brand purpose. I asked my friend why he wanted to start this company in the first place? What impact did he want to have and for whom? What contribution did he want to make? From this introspective work, it became obvious that as a former professional soccer player himself, his passion was to help young athletes achieve their full potential and fulfill their dreams— whatever that may be. Instead of defining NIFOM as an apparel company, we defined his company's purpose: To support and celebrate the amateur athlete’s journey. The main way to do that would still be to offer high quality apparel at a lower price, except now it was not to undercut the competition anymore, but to best support academies and athletes. By saving those academies money, they could reinvest it in their players' development.
Once we lifted the veil of competition, it opened up a wide range of possibilities. How far could we take this idea of supporting and celebrating the amateur’s journey? What else did amateur athletes need? In what other ways could we support and celebrate their journey? We discussed ideas like putting money aside from each account to help support academies’ most pressing needs. We talked about offering scholarships to players that couldn’t afford to pay to join academies. We discussed ways to partner with services adjacent to sports academies, like sport nutritionists and psychologists, gyms and hospitals. We talked about offering NIFOM summer camps and hosting tournaments.
All these ideas would be impossible to even think about if we remained hyper focused on competition instead of the people we were aiming to serve. That’s the power of using empathy for positioning. The goal is not to be different or to beat the competition. Both of those things happen as a byproduct of bringing to market a new and unique value proposition
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