What Should You Steal From Your Competitors?
Our go to market strategy for starting our company was based on copying our competitors. Right down to the part number, the specifications, and the data sheets, that’s exactly what we intended to do.
I told an interviewer when we came out of stealth mode and launched our first set of products that companies in our industry including Intel, AMD, and my previous company, Maxim Integrated Products had used this exact strategy (second-sourcing) to launch their companies. I also said we were developing a suite of unique, proprietary products in parallel with the second-sources.
You have to have a valid reason for what you copy.
The reason we choose this strategy, I went on tell the interviewer, was to build revenue and credibility with customers. Our business model solved a problem for customers worried about supply shortages which were common in our industry.
We had researched the products to develop, so we knew they were high volume. We also knew the customers to go after. In addition, we were very careful not to violate any of our competitors patents. This forced us to develop new techniques that led to tremendous innovation that we applied to later products.
Building a business based on copying your competitors, even if you have all the data to support your decision, isn’t straightforward.
So, with all this knowledge that we had done researching the right products to develop and the right customers to target, our initial products still sold very slowly.
Maxim’s achilles heel, going back to its early days, was not delivering products on time. There are legendary stories of Maxim shutting down major customers manufacturing lines. Many companies forbade their engineers from using Maxim products in their new designs.
That’s why we felt good about our initial strategy. But Maxim reacted to our entrance into the market by fixing their manufacturing issues. It wasn’t until our proprietary products (fueled by the innovations developing the second-source products) started selling that our second-source products started selling.
You can copy non-obvious things your competitors do well.
Our go to market strategy of using advertising to gain traction was also stolen directly from Maxim’s initial go to market strategy. The strategy was a key to Maxim’s explosive growth, and it fueled our growth as well.
The reason it worked well was we were taking advantage of a change in Maxim’s core strategy. For years, Maxim had focused on serving smaller customers, but the had shifted to focusing their efforts on Apple, Samsung and other large OEMs.
We focused on the smaller customers Maxim had left behind. And we did it using a heavy dose of digital advertising of various flavors.
You should modify what you’re copying to suit your needs.
I was lucky to have worked with some really brilliant people at Maxim. One of the smartest was the late Ziya Boyacigiller.
Ziya went on sabbatical for about six months one year. When he came back, he had an incredible idea for how we could rate the various product ideas various people in the company proposed.
The result transformed Maxim’s product selection process, giving it rigor it previously didn’t have. However, like any system, people learned to game the system over time, so its usefulness diminished over time.
The good news from our perspective was that we understood the flaws in the process. So we modified their system to suit our needs. Then we added in a twist from Linear Technology (one of our other large competitors) .
The result was a process that was uniquely our own, yet was copied from our two closest competitors. Most importantly, our process worked really, really well.
For more, read: How Do You Tell Investors Why You Will Beat Your Competitors?