Think, for a second, about your competition. Are you: A) chasing your industry's leaders or B) looking down from on top? According to a new survey,
Think, for a second, about your competition. Are you: A) chasing your industry’s leaders or B) looking down from on top?
According to a new survey, the results of which were first published by Inc. on Tuesday, odds are good that you identify more with option A, even if option B is your reality. In a poll of 620 U.S. small business owners, conducted by online lender and small-business cash-flow platform Kabbage, 60 percent of respondents believed their revenue growth underperformed that of their peers. Mathematically, at least 10 percent of them are likely wrong: If the survey’s sample size is statistically significant, more than 50 percent can’t actually be below average. Indeed, less than 11 percent of polltakers were able to correctly identify which revenue percentile they were in.
In other words, you may be underestimating your company’s performance, and overestimating that of your competitors. This seeming lack of confidence surprised me–often, the founders I speak to have more faith in their companies than anything else.
I called up Kabbage co-founder and president Kathryn Petralia to ask her about it. She believes that this data reflects a disconnect between how easy you think it’ll be to start a company and how difficult it actually ends up being once you take the leap.
Petralia went on to say she views this as a positive, not a negative: Thinking that you’ve fallen behind can be highly motivating, regardless of the reality of the situation. “You’re motivated by competition, and working against the odds,” she says. “Part of being competitive is thinking you’re not good enough.”
Many of the entrepreneurs I’ve interviewed say it’s better not to think about the competition. You know what’s happening within your own walls, they say. You can only guess what’s happening elsewhere, and focusing on those unknowns can lead to fatal distractions.
Perhaps that advice needs a tweak: Don’t obsess over your competition. But if you’re the kind of person who functions best when you feel like an underdog, then maybe you do need to keep one eye on your company and one eye on everyone else.
Clarification: An earlier version of this article did not reflect the scope of Kabbage’s business. It is an online lender and small-business cash-flow platform.
Published on: Feb 18, 2020
This article is from Inc.com