I was recently being pitched by a smart team of guys who are building an interesting business in the digital music space. The team has great domain expertise and plenty of credibility as entrepreneurs who have built a number of related businesses in the past. They were doing a nice job of selling the opportunity . . . until they got to the competition slide.
I have noticed that often times when I am pitched on a business, the competition slide is treated as, at best, a necessary evil. It's in there because it is "supposed" to be, but not much more. Sure, I've seen some really creative ways entrepreneurs have found to place themselves alone in the upper right corner of a 4X4 matrix. And I've heard -- perhaps more often than is merited by reality -- that there isn't any competition. But I rarely get a thorough assessment of how others are approaching the opportunity and how the pitching team is meaningfully differentiated.
So why should you focus on the competition? Isn't that just unnecessarily opening yourself up to questions about your business that may not otherwise be raised? Shouldn't you focus on your own business and its powerful attributes and not on the competition? Sure, the glories of your own product and strategy should be the centerpiece of your presentation, but the competition slide gives you a unique opportunity to show how smart you really are about the market you are attacking. Great entrepreneurs eat and breath the space in which they are building their business. And they don't just internalize their own market strategy, they watch every move the competition makes.
How do you know a great entrepreneur when you meet one? Great entrepreneurs would do a better job running the competition than their competitors are doing. They can tell you not only the ways in which their strategy is better than their competitors', but also the ways in which their competitors have created the very opportunity that they are exploiting. There is nothing more credibility building during a presentation than doing a great job of answering questions about the competition, and nothing more damning than doing a bad job.
My advice to any entrepreneur -- learn as much as possible about the competition. Not just because you'll do a better job of pitching your company, but because you'll do a better job of running your company. And, in the end, that is what ultimately matters the most.