Even if you do come up with a new product or service and market it to an underserved market, it's only a matter of time before a competitor--sometimes a large competitor, like an Amazon or Google--enters your space. In fact, if your idea is any good, it's practically guaranteed to have copycats.
While it can be scary when a competitor enters your space (especially if that competitor is a tech Goliath like the ones mentioned above), it can actually be a good thing for your business. Here's why:
It builds awareness and acceptance of what you do.
Being the only player in a market, especially if you're small, doesn't build outsized consumer confidence in what you're doing. You're much less likely to garner search traffic, media coverage, or even customer conversions if people have nothing to compare you to.
Once a competitor enters the scene, what you offer--a product or service at a certain price, with certain features, marketing to a certain market--is given much more credence by practically everyone involved, driving down your customer acquisition costs and driving up your reputation.
It confirms you're on the right path.
If no one else is attempting to do what you do, is that a good thing? In most contexts, including this one, the answer is no.
Maybe you're a visionary who sees an issue and solution no one else has identified. But, on top of this scenario being highly unlikely, it still won't stop others from entering the market and undercutting you with a lower price, or by pouring money into marketing to drown out your offering.
Once competitors enter your industry, you'll have to work harder to differentiate yourself (more on that in a second). But it confirms that your business is on the right path, because others see the value. That can be reassuring for you, your team, and your potential partners or buyers.
It creates the possibility of partnership, merger, or acquisition.
You don't need to view every competitor as an enemy. In fact, there might be an opportunity for some kind of relationship between your business and a competitor's.
Depending on your and your competitor's respective positions, you may be able to create an affiliate partnership, where one company pays the other for passing along promising leads that convert into customers.
There's also the possibility that you and your competitor may work better together--through a merger, or through an acquisition. This could open up a new world of possibilities, such as expanded capabilities, a larger market share, and more buying power.
So if a competitor does appear on your radar, what can you do to take advantage of the situation? How can you use this to your advantage? A few tips:
Double down on marketing, particularly SEO.
The entrance of a competitor is going to build awareness and acceptance of your business idea. This means more people will search for your product or service, and you'll want your content--blog posts, resources, and landing pages--in the first page of results. Don't miss out on the rising tide.
Focus on differentiating your product.
Offering the same product as someone else at a different price point isn't differentiation. To differentiate your business, focus on how you can improve your strengths and make them your unique value proposition in this space. That might mean an unparalleled customer service experience; an outstanding supply chain that makes for a fast, efficient, and cost-effective distribution process; or building social good or sustainability into your business model--something you can trumpet in your marketing campaigns.
If you aren't sure what your strengths are, surveying existing customers to ask why they use you is a good place to start.
Keep an eye on competitors without overreacting.
When a competitor enters your space, don't just kick back and relax. It's time to do your homework and learn your competitor's size, their capacity for growth, and what strategies they might use to plug the gaps you've left open for them. You can do this by setting up Google Alerts for their name, reviewing their activity on social media and job boards, checking with your suppliers to see if they have intel, or even calling them up directly to talk shop. (Yes, some business owners will be happy to discuss the industry with you--provided you do the same.)
Competition is a constant throughout every industry. Don't let the introduction of a new player throw you off your game. Understand the value that a competitor brings to the table--then capitalize on that value.