Competition - The Khuram Dhanani Blog
454
post-template-default,single,single-post,postid-454,single-format-standard,bridge-core-3.0.1,qodef-qi--no-touch,qi-addons-for-elementor-1.7.2,qode-page-transition-enabled,ajax_fade,page_not_loaded,,qode-title-hidden,qode_grid_1300,qode-content-sidebar-responsive,qode-child-theme-ver-1.0.0,qode-theme-ver-28.7,qode-theme-bridge,disabled_footer_top,qode_header_in_grid,wpb-js-composer js-comp-ver-6.8.0,vc_responsive,elementor-default,elementor-kit-12
Khuram Dhanani

Competition

One of the tendencies seen most often in entrepreneurs who become dominant in their chosen markets is an aggressive or highly competitive personality. Business by its very nature requires a willingness and ability to compete with rival enterprises. While many are content to keep business competition at a “friendly” level, there will always be entrepreneurs willing to be more merciless. 

The sober fact is that highly aggressive competition often gets the job done by pushing rivals out of the market and attracting customers. 

This is not always the case, of course. Sometimes excessive tactics may backfire. Consider the chain store owner who decides to build a new outlet right across the street from a top competitor. The right combination of promotion and pricing may draw customers away from the competitor, but if the competitor’s customers are highly loyal or aren’t attracted to the new store, the expense of building and staffing the failed outlet may cost the competitor dearly.

Since many consumers find the idea of cutthroat competition repulsive, savvy competitors know how to attack their rivals without making their aggression evident. Offering lower prices that can’t be matched is one of the easiest ways to pull customers away. Making exclusive deals with suppliers behind the scenes is another approach. 

Those who develop a long-term reputation as formidable competitors usually develop their competitive nature at an early age. This trait often develops under stressful, painful, and challenging experiences during childhood. 

Cornelius Vanderbilt provides a great example of a cutthroat entrepreneur. Working to help support his parents and eight siblings, he ran a ferryboat across New York Harbor at 16. With the lives of multiple passengers in his hands, he navigated the sometimes treacherous crossing in all types of weather. Vanderbilt faced an incredibly competitive market. Ferry companies did their best to steal passengers and make life as rough as possible for their competitors, sometimes even sabotaging the ferries of other companies. 

This highly competitive environment toughened Vanderbilt. Not only did he survive such aggressive competition, but he thrived in it. Vanderbilt had a strong head for business and was soon able to buy more boats. His success with this small fleet drew the attention of a local steamboat company, which hired him as its chief pilot. This company was involved in a vicious struggle with another steamboat firm, and Vanderbilt used all the roughest tactics he had learned. Ultimately, he won the steamship battle, too.

For the rest of his life, Vanderbilt was regarded as a ruthless businessman, and he frequently lived up to this reputation. It’s easy to see that this trait can be traced back to his painful struggle for survival as a teenage boy. As a young man, Vanderbilt learned to fight, and fight hard for what he wanted.

Thomas Edison is another famous American entrepreneur who had no qualms about driving his rivals out of business. Like Vanderbilt, this tendency appears to stem from the traumatic experiences of his early years. As an entrepreneur, Edison participated in hundreds of lawsuits against competitors, whether the suits had any merit or not. As an inventor, Edison relied on patents as the basis of his income; patent holders guard their property jealously and file suit at the first sign of infringement. Edison was no exception.

Forced to constantly fight patent infringement from the beginning of his career, Edison went overboard later in life. He routinely sued anyone whose invention vaguely resembled one of his. He spent years unsuccessfully trying to control the phonograph and motion picture markets, alleging that his early patents were being infringed upon by the later innovations of others. Edison would have held a monopoly on motion pictures and recorded music for decades if he had had his way. However, the clicking point of the competition was the goad that inspired him to become one of the world’s most incredible entrepreneurs.

As much as we may decry our circumstances, it’s very clear that we live in a society that respects and encourages competition. Competition is everywhere you look, and we are quick to judge who is better and who has more. Often established as a deep-seated belief in childhood, comparisons and competition are often core factors in the personalities of wealthy entrepreneurs. Competition can be positive or negative depending on the process and the outcomes, and when it comes to being a successful entrepreneur, competition often plays a significant role. If you are highly competitive, aggressive, and ambitious, your belief in competition has formed the way you think and feel, leading to your behavior and desire for performance excess.

Khuram Dhanani
Khuram Dhanani
Khuram Dhanani
kd@softstonecapital.com