Focus on self, not competitors, says venture capitalist

2/9/2011

Many entrepreneurs exert a lot of time and energy trying to find out what their competitors are doing. The motivation to do this is sound - if business owners can understand their competitors' business models, they can position themselves to capitalize on their rivals' perceived weaknesses.

However, venture capitalist Fred Wilson suggests that small business owners instead focus on simply doing their best. By over analyzing competitors, entrepreneurs may restrict their thought process to thinking only in terms of their rivals. This may prevent them from seeing new opportunities or overcoming existing challenges.

"One mistake I see startups make a lot is getting too focused on what is going on around them. They spend too much time trying to figure out what their competitors are going to do," Wilson told Inc. magazine. "The reality of startups is that there is so much opportunity out there that if you just focus on what is in front of you, your company will do fine."

With small business lending practices relaxing, entrepreneurs are in a better position to focus on their own operations. Now they can afford to be progressive and experiment with their existing business practices.