Competition and the Rochambeau

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Do you know who your competition is? How about who it might be in the future? During this episode of Startup Hustle, we talk about competition and what you should pay attention to, not care about and why it’s sometimes not bad to have competition.

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Matt DeCoursey:
And we're back with another episode of Startup Hustle. Matt DeCoursey and Matt Watson here to try to help you understand what it take to get your business to the new level. Matt, what do you want to talk about today?

Matt Watson:
You're not going to believe this but we're going to talk about the Ro Sham Bo today. We're going to talk about competition, baby.

Matt DeCoursey:
Oh, man. Do you want to do one just for the sake of it?

Matt Watson:
Yeah, let's do it.

Matt DeCoursey:
Ready, go.

Matt Watson:
Aw.

Matt DeCoursey:
Again.

Matt Watson:
Aw. Aw.

Matt DeCoursey:
Wow.

Matt Watson:
Wow.

Matt DeCoursey:
Three out of three. Should we just-

Matt Watson:
Lame.

Matt DeCoursey:
I think we both are the hosts on this.

Matt Watson:
That's right. All right.

Matt DeCoursey:
All right.

Matt Watson:
We're going to talk about competition today. What do you think?

Matt DeCoursey:
Well, what about it? I've a lot of it.

Matt Watson:
I've got a lot of competition. Does it ... Can you sleep at night?

Matt DeCoursey:
Yeah. There was a time when it might have been a little tougher, but yeah. I can.

Matt Watson:
Well, if you're ... Let's see if you're thinking about starting a business. How do you feel about competition? Does that keep you away from starting a new business? How paralyzed does that get somebody? Or should they get some?

Matt DeCoursey:
I've got a couple ways to look at it. First off, if you're trying to start a business in an industry that has no competition, I might actually look at it and say, "Am I first or am I just way off here?"

Matt Watson:
That's right.

Matt DeCoursey:
Because it's a big world and there's a lot of people doing a lot of the same things. Market size and competition can oftentimes indicate that there is demand.

Matt Watson:
I think you have a great point. There are definitely things like say solar panels for a house, all these different electric cars, all these other things that might be real big trends today that maybe they could have happened 10 years ago or 20 years ago but the market wasn't ready for it, right? Sometimes it's timing.

Matt DeCoursey:
I oftentimes tell people that I don't believe that there are any original ideas left. And I'm looking at Mr. Watson shaking his head while I say that because I think he agrees. The likelihood that you're first at something is very small. Now, with that being said, you can have too much competition, right?

Matt Watson:
In some ways, is that a good thing or a bad thing? I think there are some books out there that would probably tell you that most markets consolidate down to a market of two or three leaders. Now that doesn't mean there's still not a whole lot of other people in the space that have their niche or their piece. But a lot of industries, like we have Uber and you have Lyft. There's a whole of different things in different types of businesses like that, where you have two or three companies that are the leader. But take Uber and Lyft, for example, we've got other providers here in the Kansas City area like zTrip and stuff like that, that they're here, they're in business, they're successful. There might be two or three that are the unicorns, that are worth a billion dollars or whatever, but there's probably just as many other smaller competitors that are still out there.

Matt DeCoursey:
Do you know who Jack Welch is?

Matt Watson:
I do know that name.

Matt DeCoursey:
You've heard of the name, right?

Matt Watson:
Yes.

Matt DeCoursey:
Okay. Jack Welch is very well known. He was at one point the CEO of GE. For those of you that don't know, GE makes everything. They have their hands in a ton of different businesses, so here he comes into the business and he looks at all these different things that they do and there was a lot of things that they were the number 20 person on the list or company on the list. What he immediately started doing, they ended up calling him Neutron Jack because he just started selling off all of these divisions of GE. Some people said he was crazy, like, "We have market shares that if you're not first or second, you're probably going out of business." That's not always the case, but much like you just said, you usually narrow these things down to a very short list of people that are players. I think when you're looking at the overall competition that you're going to be up against, first off, you have to figure out, well how much further down the road are these people. And then with that, you've also got to get some consideration to whether or not you're going to be able to catch up and compete.

I mentioned a couple episodes ago with GigaBook, we just gave up. We surrendered immediately on certain industry types about food. We didn't want to compete with Open Table. That game was over before we even started. In that situation, yeah, the competition did scare us off-

Matt Watson:
Well-

Matt DeCoursey:
Because it is just not going to happen.

Matt Watson:
Well, I think in a lot of markets it does come down to two or three really big players. But that doesn't mean there's lots of other littler fish in the sea, right?

Matt DeCoursey:
Right.

Matt Watson:
I mean there's always people that have a specific specialty or whatever and sometimes, I would actually argue that markets that have consolidated down that far are ripe for destruction because if everybody uses that one thing, that one company is probably not being as innovative either. These really big companies, one thing I've really learned. I sold my first business and it's been a few years and they ... how much innovation have they done, right, over that period of time? These big companies don't take risks, right? As entrepreneurs, we take risks. That's in our blood. That's what we do. I think that's our opportunity as a lot of these big, big companies ... yeah, maybe it's a small market or it's a small number of people that own the market, but they're not going to take risks for what some of the new things are in those industries. If you can come in and are willing to take the risk and own a part of the market, you could be really successful.

Matt DeCoursey:
There's a lot to be said about ... Have you played the game Battleship, Matt?

Matt Watson:
Oh, absolutely.

Matt DeCoursey:
Okay. What's the hardest ship to hit?

Matt Watson:
The smallest one.

Matt DeCoursey:
Right. Well, that can be your business.

Matt Watson:
Right.

Matt DeCoursey:
If you're small and you're nimble, these large companies have a very hard maneuvering and making changes. I like to compare it to trying to turn a battleship around in a swimming pool.

Matt Watson:
Well, here's, to me, one of the biggest problems they have is if you're a publicly traded company and you do a $100,000,000 year in revenue, you've got a board and a company charter that says something along the lines of, "We've got to grow 14% a year. We've got to increase revenues by $14,000,000." That's a big number, right? They're looking for big opportunities. Us little guys, we're like, "Hey, we'd love to just have $14,000,000 and we're willing to do a lot of different things to get the little pieces and do this and do that." Well, these big companies have to make big moves. That's why you see a lot of companies, they go up market. They start out small and they grow and they get bigger and bigger. Then all a sudden their customer base and the type of company that they're targeting gets bigger because they're trying to move those numbers bigger and bigger and bigger, right? They're ... Then they've got to got from $100,000,000 to $114,000,000, they've got to find some whales. To the example of GE, when you're a company that's doing billions of dollars, those little business units they have are rounding errors and for them, they'd rather just discard the rounding errors. To us, those rounding errors are huge. We'd be really happy, right? But to them, it's different.

Matt DeCoursey:
We've a lot of analogies to sea creatures here. Whales and minnows and different fish. Well, all those fish are in there, they're making a living and they all do things a little differently. There's fish that literally live in an ecosystem that do nothing but wait for the whale to discard or have something else come out. I'm not saying that you should try to build a business that's a bottom feeder, but you have a lot of opportunity. Now, Matt, when you sold your company, it was to a bigger company, right?

Matt Watson:
It was.

Matt DeCoursey:
Okay. If your goal is to have a startup ... All right. I would build startups because I want someone to buy them. It's the exit. It's that big check with extra commas on it that I lay my head on my pillow and dream about at night.

Matt Watson:
Well, part of that ecosystem comes back to the risk and the startups and innovation, right? These big companies do not take risk. In some ways, I can really relate to that because my last company, we got to a point where we were doing really, really well. We were killing it. I had conversations with our CEO, who was my main business partner, he'd say, "Matt, don't make any more changes to the software. We are selling stuff faster than we can. And the last thing we want is any hiccups at all. Just keep doing what we're doing. Don't take any risks because we are just killing it." I was like, "That's where innovation starts to die", right? We were doing so good that we didn't need to innovate anymore. We were trying to milk the cow that we had.

Matt DeCoursey:
Right.

Matt Watson:
And these big companies get into that mode. And then eventually they're trying to figure out how to grow faster and then that's where they've got to go acquire one of these littler companies. I tell people all the time a lot of the companies that eventually could acquire Stackify, they'd rather write a check for $200,000,000 than $20,000,000 because they want to also buy something that doesn't necessarily have a lot of risk in it. They just want to grow it. They want to buy something that they can grow. They're very risk adverse. And that's our opportunity as entrepreneurs is we're willing to bet the farm and take the risk. These big companies aren't.

Matt DeCoursey:
How much time do you spend worried about your competition?

Matt Watson:
None.

Matt DeCoursey:
I'm the same.

Matt Watson:
They're going to do whatever they do.

Matt DeCoursey:
I agree. And with that, I think that sitting around and obsessing about your competitors, your competitor's project or products, your competitor's moves, it is a huge distraction. I think it's okay ... it's good to be aware of what's going on. You want to ... I like to say, "You should have your finger on the pulse of your business." Or "On the pulse of your industry."

Matt Watson:
You need to understand the market.

Matt DeCoursey:
Right.

Matt Watson:
You need to understand the industry.

Matt DeCoursey:
Right.

Matt Watson:
And the market.

Matt DeCoursey:
Right.

Matt Watson:
Right?

Matt DeCoursey:
That's completely different than sitting there obsessed with every single move that your competitor makes. I think that that can be something that kills innovation as well because you're going to end up ... Well, you're going to be a copycat. You're going to be concerned with keeping up. And where do you stand on that? At what point do you say, "Well, am I just copying what someone else is doing?" And are you even willing to do that?

Matt Watson:
I think there are certain features you have to have that are put you at that par with your competition, right? There are certain things you just gotta do. But then, I think you always want to figure out how to differentiate yourself. For example, with Stackify, a lot of our competitors are focused on customers for IT operations, like the IT department is the buyer. Where for us, we're focused on the software development team as the buyer. Because of that, our feature set is a little different. How we go to market is different. Our advertising, our messaging, all of that is a little different. But, under the covers, the product is probably 80% the same. It's that 20% on the top that makes us unique and makes us different. Does that make sense?

Matt DeCoursey:
Yeah. Well, what ... How do you feel about people that are coming up on your tail then?

Matt Watson:
Most of the time you can see them coming. The reason I say that is think about my old business, we were signing up 50 to 100 new accounts a month. If you're the big guy who's got thousands of customers, you can see that little fish coming from a long ways away. It's like the little shark just keeps coming. And you not they're not going to go from zero to thousands overnight. They're going to get 50 and another 50 and another 50 and you can just see them coming. These big, big corporations just sit back and they watch them. At some point in time they throw enough money out and they go away.

Matt DeCoursey:
Do you know that I probably have less competition now than I had last year?

Matt Watson:
That's good.

Matt DeCoursey:
Yeah. But do you know why?

Matt Watson:
Why?

Matt DeCoursey:
Because what we do is hard.

Matt Watson:
It is hard.

Matt DeCoursey:
It's complex. It's got a zillion variables and it does a whole lot of different stuff. And I've literally watched a lot of my competition die on the vine.

Matt Watson:
Well, I think as you're starting a new company, you have to figure out od you want to be the snail that's just plotting along and you're making a few a bucks and you're successful?

Matt DeCoursey:
That snail wins the race sometimes.

Matt Watson:
Yeah. Or are you trying to go own the market? You're trying to be the whale? And to do that a lot of times you gotta go raise a bunch of capital and that's a whole different business strategy, right, than something that can be a little side project, maybe you have one or two employees and you just have a successful sort of a lifestyle business. There's absolutely nothing wrong with that. You're not going to ring the bell at Wall Street any time soon or anything, right? But you can be that small company that just plots along. You can be the snail at the bottom, the bottom feeder. Or if you want to be the biggest whale in the ocean, that's a whole different thing.

Matt DeCoursey:
What do you do ... Here you are in a market that began as a niche or it didn't have any whales in the actual category. What do you do when all of a sudden a company of a whale proportion now enters your space? Because I don't know if you know this but this happened to GigaBook last year. Microsoft launches its own booking platform.

Matt Watson:
Okay.

Matt DeCoursey:
And I actually had one of our employees come and ask me, he said, "So, are we going to quit?" I said, "Are you kidding me?" This is probably the biggest form of validation that we have received in the last five years. Microsoft just admitted that this is so legit.

Matt Watson:
Right.

Matt DeCoursey:
And this is such a valid part of future business operations. Then we actually did take a few minutes to go and look at the competition and the sentiment changed because we realized, oh my, we have got a product that is better than Microsoft's. There was just little things. You talk about that 80% being similar and I'm not going to get down on their product because obviously they're Microsoft, but with that, sometimes your competition can validate what you're doing. It can ... I would love to have the call from Microsoft about purchasing what we do. They can afford the kind of check that I'd like to see from them. Now-

Matt Watson:
I don't know about that. It may cost them more money to stop and write the check.

Matt DeCoursey:
It might. It might. I'm willing to test that-

Matt Watson:
Okay.

Matt DeCoursey:
Theory and we can see where that comes down. Sometimes geography has something to do with your overall market and your competition. How would you take that into consideration when you're looking at everything with your competition?

Matt Watson:
Well, for example, we have a competitor that's only in China. They only service China. That's all they do. I didn't even know they existed until recently. I don't remember the name of it, but there's some sort of VC accelerator company now that ... I think they're in Europe, but their whole business model is to find successful companies that have been in the US and then knock them off, but do them in another region. I think there is absolutely a market for that. One of the problems we had at my last company is we were focused only on the USA. The way we looked it is the US was such a big market, that it was such a big ocean that we didn't need to go chase Europe or Australia or any other market. That was an opportunity for someone else who wanted to, right? There was only so much we could do in our market that it didn't make sense for us to stretch ourselves in other places. That's an opportunity for other people.

Matt DeCoursey:
Does that factor into how you present yourself and your product against your competitors?

Matt Watson:
I think it can. For example, depending on what type of business you're doing, there's all sort of data privacy laws in different countries. Like in EU, they're just passing a new set of stuff and depending on what you're doing, one key advantage for you could be you go set up a data center in the EU and you focus on that. We are compliant with the laws in this area and we're hosted there and we translate your website to be in those languages, all that sort of stuff.

Matt DeCoursey:
There was a specific geographic concern that we ran into. And we have a ... GigaBook has a lot of Canadian users. The conversion rate of Canadian dollar to US basically means that they're paying about 40% more. We couldn't figure it out. We had, for a little bit ... It was as simple as just asking. But we had five or six Canadian people, Canadian clients and users complaining about our pricing. We're like, "Well, we're like legitimately the lowest in the industry. Are you just complainers?" Then we just asked one of them. They said, "Well, this isn't $20 or $38 a month for us, it's actually more like $50 or $55." With some of that and for some of our larger users, we actually had, in order to remain competitive, have given some small discount codes or different things like that because we have to respect the hustle that they're in too. Wanting to get that type of business and that was something, until it came up, we hadn't given any consideration for.

Now, with that, we've also obviously people all around the world take appointment bookings and do different stuff like that. So now you look at this, there's several hundred languages in the country, or excuse me, in the world and you have all these different considerations. I don't speak Mandarin. I can't really convert GigaBook to Chinese. What's that going to take? Sometimes it might be worth it and sometimes it might not. You have to ask yourself the question, "Would I rather the number one this in New Zealand?", which might not seem that incredibly attractive, but it probably has 100,000,000 people there or something. It could be a huge market anyway. Now, would I rather be number one there or would I rather be number 33 here?

With that, what percentage of a market share do you want to try to capture because I think, from the outside looking in, we come into startups and different ventures and we say, "You know what? If I can get 15% of the market share, we'll be in great shape." Is that a reality in most industries?

Matt Watson:
Well, I think it's good to understand the market size. So for our industry-

Matt DeCoursey:
Even a medium sized market.

Matt Watson:
We're in a, Gartner says it's like a $25,000,000,000 market. The subsegment of that, that we're in is about $5,000,000,000. I don't know ... and who knows. I mean, I'd be perfectly happy with getting my .1% of that or something, right? But that's the problem you run into is sometimes you go to VCs and investors and if you can't be the number one company in that market, they may not want to invest in you. Or if there's already somebody who's a clear leader in that market, then they may not invest in you. People say stuff like that to me. They're like, "Oh, you have a competitor that does $400,000,000 a year in revenue. How are you going to compete with them? How are you going to be successful?" I'm like, "You know, I could be wildly successful with $40,000,000 a year in revenue. I'd be perfectly happy with that."

You don't always have to be the market leader. You can just have your piece.

Matt DeCoursey:
It's revenue minus expenses equals profit, right?

Matt Watson:
That's right.

Matt DeCoursey:
Okay.

Matt Watson:
And profit is not a man with a white beard.

Matt DeCoursey:
Yes, but if we find him, we should have him on the show because he could probably tell us a lot about what industries and trends are coming towards us.

Matt Watson:
That would be really helpful, yeah.

Matt DeCoursey:
Yeah. I don't know if we'll broadcast that issue or that episode because I think we'll probably want to maybe get ahead on his advice.

Matt Watson:
Do you think he would play Ro Sham Bo with us?

Matt DeCoursey:
Yeah, but he wouldn't tie three times in a row. He'd win every time. That would not be fun. All right. Do you think that how you solve the problem has everything to do with your success, compared to your competition?

Matt Watson:
Well, I think you would take Stackify or GigaBook, either one as an example; we solve a lot problems and we solve a lot of problems for different people. Sometimes it's just the marketing that you put into it that talks about the problem is solved. It's like a hammer or any other tool, you can talk about its values in a lot of different ways. Some of your competition will be very focused on a specific problem you solve with the tool, where you could be, have the same tool, but just be totally focused on a different solution and problem. Again, that's gets back to the top 20%, but some of it is just marketing. It's just the marketing, the product packaging, pricing, all of those things to a specific market. You mentioned earlier, oh, when we sell to Canada, maybe we package it differently, we price it differently. For some, it's how you put those pieces together and price it.

Matt DeCoursey:
How do you solve the problem of coming in second?

Matt Watson:
Well, I think you acknowledge that you're the first loser. I think you learn from it. I know what you're hinting about here. What are you hinting about?

Matt DeCoursey:
Well, I think, as you're aware, recently we came in second. We, meaning GigaBook. We had ... It was just another day at the office dealing with people that were inquiring about using our service within their company. But you had an enterprise situations that are bigger fish. Those are your whales as a salesperson. We were in a 30 company pool to start with and we ended up, we got the way down to the bracket had eliminated everyone else, down to us and one other person or one other company. We came in second. That doesn't feel good, but how do you handle that? And how do you deal with that? And then I'll tell you my way of dealing with it.

Matt Watson:
Well, I think a lot of them are lessons learned. At my last company, we used to go through that stuff a lot with RFPs. We'd have big automotive manufacturers that would come to us and say, "Hey, we're going do this, that and the other. We want you to fill out this giant RFP.

Matt DeCoursey:
What's an RFP?

Matt Watson:
Request for Proposal.

Matt DeCoursey:
Okay.

Matt Watson:
And basically they'd send us this giant checklist-

Matt DeCoursey:
Sure.

Matt Watson:
Of what does our product do? How does it work?

Matt DeCoursey:
Yep.

Matt Watson:
Yada, yada, yada. We would submit this stuff and you know what? The first time, first few times you do it, you usually come in second or last or whatever. But eventually you get the experience and you figure out what they're looking for, what is it going to take to win this eventually. And after I left, they started winning some deals. They had done big deals with Lexus and some different people, like every Lexus website in world was done by them. They won some of those big deals eventually. But I think it's you have to play the game a little bit. But I think you also can't live and breathe by that. You have to know you're playing the game. You're like, "Yeah, we're probably not going win this, but how much effort do we put into it to learn?" It's a learning experience I think the first few times.

Matt DeCoursey:
I am a sociopath when it comes to this kind of stuff. It's really easy at first to get mad and to be upset. First off, I'm also thankful that we're able to come in second out of 30.

Matt Watson:
Absolutely. That's a huge accomplishment, right?

Matt DeCoursey:
But in the game of sales, if you're not first, you're last. Without a doubt. With that, you have to look for areas that you can improve. The thing that I ... When I got that recent news about coming in second on this proposal, what good is being upset going to do? It's not going ... Unless I can channel that into something positive and I can do something better next time, it really isn't productive to get upset about it. Now, am I upset that we didn't get the bid? Sure. But not in a way that I'm yelling, that I'm angry, that I'm legitimately having this toxic rainstorm in my mind and my body about everything that's going on. I do use that kind of stuff as motivation to do better. I do consider all the things, like what ... in this particular case, we lost to a competitor that did have a very specific background servicing companies like we bidding towards. I understood why we didn't get it.

Now with that, that's difficult to change but perhaps there's one thing you'll get. You need to look for these repeating trends. Am I not getting the deal because of this? And then that same reason, that same reason, that same reason. That's a pretty good way to start forming your strategy towards future bids. What ... I keep losing on this particular checkpoint. Well, that's probably where we should be handling it. Now with that, when we talk about providing services for people, do you think that enterprise accounts are 100% of the time always good?

Matt Watson:
They come with their pros and cons, right? At my last company, as a good example of this, we had one manufacturer that reached out to us and I think we won. We're like, "We want you guys. We want every one of our car dealerships who want to use your software." But they only wanted pay us like $400 a month or something like that. And our average customer paid us $1,500 a month. We're like, "No, we're not going to do it. We're going to sign up every one of your dealers anyways for $1,500 a month. Why would we take $400 from you and any point in time, you can cancel all of it too?" Right? "Why don't we just go collect all of the little fish by ourselves?" Yeah, I mean in all these things there's pros and cons, right? It'd also be nice to get that big fat check from them.

Matt DeCoursey:
Yes. That's the decision we have to make but we need to keep in mind the bigger the account, the more needs it's going to have, the more stuff you're going to have to do. If you're selling something like software, you're quite possibly going to have to build or customize something for these kind of accounts because that's what they're after. If they could just sign up for your service and do that 8,000 times, then that would be easy enough. You have to also think about ... I'd imagine in your situation that you just mentioned ... because here's the thing, margin matters.

Just because it's a whole lot of revenue, if you have to take on even more expense or if it creates an opportunity cost that is so high and we can define opportunity cost as the option we didn't take. If you have to take everything you do and dedicate towards one account, are the other 99% of your accounts going to suffer? Because you might find yourself so involved with servicing one particular aspect of your business that the rest of it can get swept under the rug. Or you might not meet other measureables or timelines that are pretty important to your overall success. Sometimes it's not the end of the world if you don't get those things, but the big accounts certainly help you grow.

In regards to competition, I think we went through a few things here and we've talked about a couple of things. It's not a bad thing and actually I think one of the ... Competition can also stir up things for you.

Matt Watson:
You can ride the wave of somebody else, right?

Matt DeCoursey:
Right.

Matt Watson:
There's a market leader, be it Uber or Lyft or something like that, and then we got little old zTrip here in Kansas City, they're riding the wave.

Matt DeCoursey:
Right.

Matt Watson:
Right? If Uber never came around, maybe zTrip would've never came around, so they're riding the wave.

Matt DeCoursey:
Well, what about other companies, like let's use Bungii.

Matt Watson:
Bungii. Yeah.

Matt DeCoursey:
Bungii's a Kansas City startup and Matt and I both know Ben Jackson, the founder. They're a pickup ... If you need a pickup truck to come help you pick up the new entertainment center that you bought from Ikea and it won't fit in your Smart Car, they want ... Bungii will help you get a pickup truck and some of the help ... We should have Ben and the guys from Bungii on here sometime. How do you feel about that?

Matt Watson:
I think it would be cool. Yeah. Maybe they'd come pick us up in a pickup truck.

Matt DeCoursey:
Actually that's how we should do it.

Matt Watson:
Yeah.

Matt DeCoursey:
That'd be a good idea. But that's an example of competition. Then here's the thing is Uber and Lyft are doing the heavy lifting of educating people about this particular kind of on-demand service. A lot of people ... I'm thinking GigaBook, we've found that we don't ... I don't have exact numbers on this, but we just assume that if you signed up for GigaBook that you signed up for three other services, making us one of four. That we're going to have to measure up and compete against other people no matter what. So you think people sign up for Stackify doing the same thing? Do you find that?

Matt Watson:
I think it depends on the company and who you're dealing with. Definitely larger companies are probably going to sign up for your competitors and kick the tires a lot more. But I think the smaller companies, they just see something and they're like, "Oh, this is cool" and they just jump on it.

Matt DeCoursey:
Sure.

Matt Watson:
And are probably less likely to go through the rigorous acquisition process.

Matt DeCoursey:
Is that why the first space when buying ads on Google is more expensive than all the rest?

Matt Watson:
It probably is, yeah. I don't know about you, just using Google as an example, how many times you do a search and you just sort of click on the first result and don't even really read through all of them?

Matt DeCoursey:
The numbers on that are ... and I'm going to be very unscientific here, but the difference between the first and the third spot for clicking is like 70, 40, 10.

Matt Watson:
It's, yeah.

Matt DeCoursey:
Because most people, once you get the needs met that you're looking for, you're done.

Matt Watson:
Yep. Absolutely.

Matt DeCoursey:
Path of least resistance.

Matt Watson:
Yep.

Matt DeCoursey:
We're happy with what we got, even if it's not good.

Matt Watson:
It all depends on what you're shopping for, right? If you're trying to acquire some software and you're going to spend $1,000,000 a year on it, you're going to do a little more due diligence, right, than the first click. But if it's a simple solution, like I'm looking for an ugly sweater for Christmas like, "Okay, first result. Whatever. I'm going to go look at them."

Matt DeCoursey:
You can find an unlimited supply of those at my house, in most sizes.

Matt Watson:
Do you have any in gold?

Matt DeCoursey:
Probably.

Matt Watson:
Okay.

Matt DeCoursey:
I have quite a few. I was quite the ugly sweater connoisseur. I'll probably wear one to your Christmas party now that you mention it.

Matt Watson:
Perfect.

Matt DeCoursey:
Yeah. I have one that have stockings sewed to it and stuff and we can put goodies in the pouches. When you talk to your clients or perspective clients about your competition do you ever say bad stuff?

Matt Watson:
I think we usually focus on where we're different. It's like, "Hey, we're", my example earlier like, "Hey, if you're looking for a product like ours for the IT department, maybe we're not the best fit, but if you're looking for it for software developers, we're the best fit and the is I why."

Matt DeCoursey:
I never say bad stuff about my competition. You know why?

Matt Watson:
Why?

Matt DeCoursey:
No one wants to hear you air your dirty laundry, hang out your dirty laundry and air your grievances with your competition. In fact, it probably stands a greater chance of you not getting that client because negativity isn't really the right way to get a new client. It's easy to sometimes get salty with your competition, especially if they've been handing it to you for a little bit and you have to keep hearing this and that and they do this and they do that. Okay, that's great. Well, why aren't you using them then? Why are you even talking to me? See, that kind of reaction isn't going to really endear your client to you. I focus on ... I have an acronym: FAB, features, advantages, benefits. If I'm going to talk about something and if I'm going to talk about my competition, I'll say, "You know what? I'm no totally ... I'm not the expert on what they do. I have a pretty good idea of it. We have some similar features. Here's the advantages that we have over that and these are the benefits that those advantages produce." Because that's what people are in to. That's what they want to buy from you and they're not necessarily on the line with you to hear you talk about why the other five competitors are terrible. I think it's good to avoid that. I really just always take the high road, in that regard.

Now, at the same time, if you have clients that are coming over from your competitor, I use this ... I feel that that is a golden opportunity to ... I say, "Matt, are you using any booking software right now?"

Matt Watson:
Yes.

Matt DeCoursey:
Well, I know you're using GigaBook, but let's say you were using something before that and you're talking to me. I'd say, "Could you tell me what their not doing that you need done?" At that point, now you have a client telling you exactly what you need to do for them in order to get their business.

Matt Watson:
I've got a great story on that. In my last company we did SRM for car dealers. Most of our competitors, it seemed like every one of them had these two or three little features that everybody loved and what we did is we kept listening to customer feedback, like you mentioned and we figured out, oh, if they're using product X, we know that they really like A, B and C. We really would cater our demonstrates and everything too. You get on the phone with somebody like, "Oh, you have that product. Okay, Well, hey, we also do A, B and C. We're going to ... Those are things that are par, so when you make this switch, you're not going to be giving those three things up, but here's the other 10 that are the reason you're going to make that switch."

Because what we find, more often than not is a lot of times people get really attached to some weird specific feature about a product. For example at Stackify, one of the features we don't have is a service mapping diagramming thing that draws charts basically. We don't do it. We're like, "That's just not something we do." But we know, from one of our competitors, they beat that into their customers about how important that is, so we know every single time we talk to them, we're like, "Hey, we don't do that. If that is the number one thing you're after, fine." We know eventually that's feature we've got to build, but what you've got to learn is where you win and lose and if there's little bells and whistles that you know your competition has can you ... are those satisfiers that you've got to build just to make you even par with your competition.

Matt DeCoursey:
In the last episode that we recorded I mentioned other than the word sold, that my favorite four letter word in sales is next. The story that you just told, if you have ... if those users are so hung up on that one thing, that not having it means they're not going to sign up, you're probably wasting your time. You actually are yelling next, in some regards by letting them know. I just did this yesterday. I was talking to someone on the phone about GigaBook and they have inquired. And they wanted to do a specific thing. I had to say, "Look, we don't do that and I don't think we're going to do it any time soon."

Matt Watson:
I had the same thing this week.

Matt DeCoursey:
Because here's the thing, I'm just wasting ... They're going to figure that out eventually. They're not going to have a good experience. I'm wasting my time. I'm wasting their time. And I find that people overwhelmingly thank me for that. They say, "Well, thank you for being so upfront and transparent." And I say, "Hey, "I'm going to end up wasting a bunch of time trying to help you get something set up that we don't do." I'm still ... These are these obscure cases. There are certainly things that, like you said, we realize that we need to do a better job of in order to get some users. You know what? You know what I think we need to do a better job of? I think we need to settle this paper, scissors, rock, Ro Sham Bo war that we're tied on. And I want to do that right now before we end this episode.

Matt Watson:
All right. Ready?

Matt DeCoursey:
Ready? Yes!

Matt Watson:
Aw.

Matt DeCoursey:
DeCoursey wins. You know what? I've got to say, Matt, you're on a losing streak.

Matt Watson:
I'm sorry.

Matt DeCoursey:
What is that? Three episodes in a row?

Matt Watson:
Yeah. I know. Well, like I said-

Matt DeCoursey:
I mean, at what point do we get to talk about the fact the DeCoursey paper, scissors, rock machine is a dynasty?

Matt Watson:
It's pretty awesome. I'm interested to acquire that.

Matt DeCoursey:
I'm willing to talk to you-

Matt Watson:
Are you also good in Vegas?

Matt DeCoursey:
Well, we're going to find out, maybe.

Matt Watson:
Maybe?

Matt DeCoursey:
I don't know. I don't think that ... I feel like any of that kind of stuff goes into the whole idea of the genie won't let you wish for more wishes. So it's probably only good for things that really don't matter. Like who gets to host this episode. Anyway, thanks for listening. We appreciate your support. Make sure to subscribe to our podcasts. You can also check out our website, StartupHustle.xyz. Hope to see you around next time.

Matt Watson:
All right. Thanks everybody.

Matt DeCoursey:
See you.