Why Do Competitors Fighting Each Other Both End Up Losing?
Competitors fighting for the same customers create a zero sum game where both sides lose. Working together to grow the total market almost always works better.
What Happens When Entrepreneurs Focus on Competition Instead of Customers?
Focusing on beating competitors instead of solving the customer's problem turns business into a fight nobody wins. Paul Veth learned this running his own bar in a street full of rivals.
Paul Veth owned a bar in Breda, positioned on what he calls a C location: the third stop in the street after the A and B spots filled up first. With several other bars competing for the same crowd, he started a competitive drive in himself. He wanted more customers, so he decided he was in competition with the rest of the street and set out to win from them.
The other bar owners felt it. They started treating him as competition too. For several months it was game on. Some days Paul Veth won, the next day another bar won. But at the end of it, as he puts it, they both didn't win. They were losing because we were fighting. The focus point had quietly shifted from the real goal, more guests in the bar, to a fight that consumed all the energy without producing the result.
How Do You Fix a Zero Sum Competition Between Businesses?
You stop fighting for a fixed share of customers and start growing the total pool of customers instead. Paul Veth did this by asking the other bar owners to work together.
Paul Veth realized the whole street was sharing the same amount of people every weekend. If he fought harder, the other bars fought harder back, and nobody's slice of the pie actually grew. So he went to the other bar owners and said: let's work together. Because if we start to work together, we can attract more people to the whole street and we all can win.
They stopped fighting and started building the street together. They organized entertainment for the whole street, made the street nicer to come to, and talked about each other more positively instead of tearing each other down. If I am a more pleasant person, people probably want to come to me earlier than when I am this competitive guy, Paul Veth says, and the same held true for the other bar owners.
Why Does a Solution to Your Own Problem Sometimes Become a New Problem?
A solution built to fix a real problem can itself become the problem when you focus on it obsessively. Paul Veth argues you have to keep returning to the original goal.
When you build a solution for a problem you had, the solution can itself become a problem if you are focusing on it all the time, Paul Veth explains. If the solution isn't working, the instinct is to push harder on the solution. But maybe the solution isn't the issue. Maybe the solution became the problem, and the real fix is to go back to the beginning and remember what you were actually trying to achieve.
In Paul Veth's bar, the original goal was simple: give people a great time. Once he refocused on that instead of on beating the competition, the right actions became obvious. If I want to give people a great time, I will never focus on putting the competition out of business, he says. When you give people the greatest time on a Friday night, they come back to you. It doesn't matter what the bar down the street is doing.
How Do You Know If You're Focusing on the Right Thing in Your Business?
Ask yourself regularly whether what you're doing is bringing your actual goal closer, or standing in the way of it. Everything outside solving your customer's problem is noise.
You have a business, you're an entrepreneur, and you want to sell your solution to a customer because that customer has a problem and you just want to solve it, Paul Veth says. All the rest you think about is noise. Even marketing is noise. You always have to go back to the drawing board and think: is this solution still great for my customers? What's in the way?
Sometimes a genuine secondary problem needs solving before you can deliver the real solution, and that's a legitimate thing to focus on temporarily. But revisit it regularly, whether that's after six months, every quarter, or every year, and ask the same question again: is this still necessary, or has it become a problem instead of a help?
Frequently Asked Questions
Why do competing businesses often both end up losing?
When two businesses fight over the same fixed pool of customers, each side escalates in response to the other, and neither actually grows. Paul Veth experienced this running a bar in a street full of competitors: some days he won, other days a rival won, but overall, as he puts it, we were losing because we were fighting. The energy went into the fight instead of into the customer.
What is a positive sum game in business, according to Paul Veth?
A positive sum game is when competitors grow the total market together instead of fighting over a fixed share of it. Paul Veth applied this by convincing other bar owners on his street to collaborate on entertainment and atmosphere instead of competing, which grew the street's total visitors from around 1,000 to 3,000 people in a weekend.
How do you know if your business solution has become a problem?
If you're focusing on a solution constantly and it still isn't working, the solution itself may have become the problem rather than the fix. Paul Veth suggests going back to the original goal you were trying to achieve and asking whether the current approach is still serving that goal or just consuming energy without results.
What should entrepreneurs focus on instead of beating competitors?
Entrepreneurs should focus on solving the actual problem their customer has, since that is the only reason the business exists. Paul Veth argues that everything else, including obsessing over competitors, is noise. In his own case, the goal was simply to give people a great time at his bar, and once he refocused there, the right decisions became obvious.
How often should you revisit whether your business focus is still right?
There's no fixed rule, but Paul Veth suggests checking in regularly, whether that's every quarter or every year, and asking whether your current focus still brings your goal closer or has started standing in the way. The key question to ask yourself is whether what you're doing is still necessary for the customer you originally set out to help.
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Discussion
The content argues that competing for the same customers is a zero sum game where both sides lose, and that growing the total market together works better. Have you ever turned a competitor into a collaborator, and what shifted when you did?