In this post I’m going to talk about how to view competitors or rather frenemies.
But first an update. I’m just back from New York where I had both a great time and also the chance to witness my team doing a major cutover of hundreds of staffing companies from a mainframe system over to TempWorks. It’s really humbling to see how developers less than 10 years out of college including my own 23-year-old daughter can code circles around me.
The good thing though was that having a great team in place I had the chance to escape a little to midtown Manhattan for an evening that included Mass at St Patrick’s (great liturgy, sermon, music but the SWAT team waiting outside afterwards spooked me). It also included a lunch at my grandfather’s namesake “Angelo’s Pizza” on 57th street.
The hardest thing for me about going out to eat in New York is picking where to go. Right in that Angelo area – it’s a bit off the major shopping area of 5th Ave. – there are dozens of the best restaurants in the world. How is it that all these great restaurants decided to locate themselves right next to their top competitors?
That’s what Frenemies is all about. “Frenemies” is a word I copped off of Mark Suster, a 
VC and a great writer (a must read for startups). Having competitors is proof that you’re in a market of substance.
Those great restaurants around Angelos are forcing each other to get better and better. And by being better, they’ve created yet a bigger market than ever would have been, causing foodies all over the world to flock there because of and not in spite of the competition.
Personally I love it when I lose to a competitor because how else better to know that we have a weakness or that there is an underserved community out there?
Calling competitors Frenemies isn’t a cop out. It isn’t a sign of limpdickedness (sure to be the word of the year sometime soon). Let me compromise on the vulgarity by pointing out a more refined way of saying that…en français “la-peur-de-qu’en dira-t-on”.
Taking a positive attitude towards competition gives you the chance to spell out in a constructive fashion the difference between you and a competitor. James Tamplin, an ex-TempWorks developer now running a startup, Envolve, in Silicon Valley recently provided a great example of this on Quora.
He wasn’t bashing his competitor Meebo; he was just pointing out in simple language how his product was different. Meebo and the rest of the frenemy social networking products out there have created a notion in the popular consciousness of what it is they do and how they can help their clients.
So should staffing companies be worried about competition? As the economy improves we’ll be seeing a lot more competition than in past years in staffing. The rate of start up activity is mind-boggling right now. But that competition is a also a sign that staffing as a market is being revitalized.
So let’s raise our hands in the air sometimes and thank our frenemies.
{ 5 comments… read them below or add one }
As a former staffing company employee, I always felt like we never “shopped” the competition enough. The best ideas sometimes come from your competition. You don’t necessarily have to copy what they are doing, but sometimes just the idea alone could inspire you to put your own twist — even improving upon — the original idea.
It is very risky to “bury your head in the sand” or have too much “tunnel vision” and only focus on what you are doing or developing. Narcissism can kill a company.
Rest assured that your customers know what the competition is doing. You run the risk of not only looking foolish by not knowing your own industry, but you also risk falling behind the times.
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I’m not fan of shopping the competition. My time is better spent taking care of the clients and candidates I’ve already got.
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Competition is what drives the market right now. Competition is the reason products get better. Without competition, there is no real drive to produce better products. And the key factor is to be ahead of the competition.
You ask if staffing companies should be worried about competition, well I say yes and no. Yes they should if they don’t take competition seriously. The company that knows customer needs, and acts on that will win out. If a company does its research, and knows what the market wants, then no, competition will just make it a stronger company with a better product.
With the economy slowly coming back, it’s going to be companies that take competition seriously that will come out on top. It’s quite cliché to say that everyone is on an even playing field right now, but honestly, whoever makes a better product in their market can and will succeed. Just because your company is / was huge (AOL), and had plenty of money at its disposal (millions of AOL CD’s sent out worldwide) does not mean you are going to last.
I guess last words are, your company can never be too big to look behind you and see what everyone else is doing.
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Gregg –
Thanks for the well written article.
I think that being open and honest with yourself is the first step in the process, then you can begin to make Frenemies. (Excellent word choice Mr. Suster)
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Should staffing companies be worried about competition? Possibly. It all depends on how they view the idea of competition. You have those people, and companies, who naturally thrive and improve off competiton. It is what brings them to their highest moments. They excel because of the competition. You also have those who break, who don’t like the idea of it, and who don’t want to compare themselves to others. There are pros and cons to both, but I believe it comes down to the outlook they have on competition as a whole.
I completely agree with your idea that competitors are the ones who make you strive for more, who naturally force you to improve your product or service. I think it is also worthwhile noting that without competition there is no way to set yourself apart, no way to stand out above the crowd. Having a strong competition is what allows you to make your mark on the industry. Competition is what allows companies to be recognized as the most innovative, the strongest in customer support, have the ability to meet and anticipate customer needs, and so forth. In addition, it is the competition that can highlight your weaknesses, just as they do your strengths, which you explained. While competition can strengthen a company, it can also have a negative impact on a company – It all comes down to who is taking advantage of the information and competition, and who is not.
So, should staffing companies be worried about competition?
Presuming they do the following; view a challenge as a positive, appreciate constructive criticism, and take extra steps to not only learn about their weaknesses and their competition – but then to do something with that knowledge, then no, they should not be worried. The competition is what is going to help them become the best staffing company they can be, and that is something to be excited about.
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