Businesses often keep a close watch on the companies around them. A new product, a change in pricing or an unexpected move by a rival can quickly become the subject of meetings and strategy plans. There is a good reason for that attention. No company wants to be caught unaware in a crowded market. Yet constant comparison can also shape the way a business thinks, sometimes without anyone noticing. When the main question becomes what competitors are doing, the next decision can naturally become how to match them or do slightly better. That may help a company keep pace, but it does not necessarily lead somewhere new.
This tension sits at the heart of a well-known observation by Eric Schmidt, the former Google chief executive, who argued that companies looking too closely at their rivals risk losing sight of the ideas and problems that could lead them in a different direction.
Because genuinely new products often emerge from asking a different question altogether: what problem has not been solved properly yet, the distinction matters. If a business begins by asking, What has our rival launched?, the next question is often, How can we make ours better? This is where competitive thinking can become restrictive. The answer may produce a faster product, a cheaper version or an additional feature. It may even be commercially successful. But it remains anchored to something that already exists. Schmidt’s broader argument was that companies need to make room for ideas that do not begin with an existing competitor. There is another point hidden inside the quote. Being unlike a competitor does not automatically make something innovative. A business can change a colour, redesign an interface or add an unnecessary feature and call the result new. That is differentiation, but it is not necessarily meaningful innovation. Innovation usually involves a change in what a product, service or system can do, how people use it or how a problem is approached. That is why simply trying to beat competitors can be an awkward objective. If the target is always another company, success may be defined by relative performance: gaining a few more customers, taking another percentage point of market share or matching a rival’s capabilities. When another company has already tested an idea, the uncertainty has partly been removed. The market has provided evidence that customers might want it. A competitor has taken the initial risk. Copying or adapting the idea can then seem sensible. For an established company with shareholders, employees and large operating costs, that approach can be tempting. Yet if several companies behave in the same way, they can begin moving towards the same middle ground. Products start acquiring similar features. Services begin to look alike. Companies compete intensely over small differences while the possibility of a larger change receives less attention. Schmidt’s point is not that businesses should ignore competitors. They still need to know what rivals are charging, developing and changing. But that information should not decide what comes next. Instead of copying what another company has built, businesses can look at problems customers still struggle to solve. A competitor offers something visible to respond to; a customer problem leaves room for experimentation. Question existing features: Instead of copying a rival’s feature, consider why it exists and whether there is a better approach. Look at competitors afterwards: Competitive research can reveal gaps and opportunities, but it should inform decisions rather than dictate them. Notice what is missing: Pay attention to customer groups, problems or processes that competitors have overlooked. Challenge familiar methods: Innovation does not always mean creating something entirely new. It can begin with questioning whether the existing way is still the best way. Stop comparing your progress with others Identify your own strengths Solve your own problems Use comparison as information Try something unfamiliar Focus on improvement, not imitation Learn from what others miss Define your own measure of success Question the usual way Protect time for original thinking Get the latest technology news and updates. Download the TOI App.
Schmidt’s warning appeared in How Google Works, the 2014 book he wrote with Jonathan Rosenberg. A rival has introduced a new service. “If you focus on your competition, you will never deliver anything truly innovative. Schmidt’s argument is more specific: competition should not become the main reference point for deciding what to build. There is an important distinction between knowing what other companies are doing and allowing their actions to determine your own direction. A business needs to understand its market, recognise threats and pay attention to changes around it. But when every decision begins with a rival’s latest product, the result can become a form of organised imitation. In the discussion surrounding competition, he described the tendency of established businesses to spend too much time monitoring rivals and then responding with small improvements of their own. Competition is easy to measure. Another has gained market share. Someone else has reduced prices. These developments give executives something concrete to discuss in meetings and something measurable to respond to. An idea may have no obvious competitor. It may not fit existing categories. It can take years to develop and may fail before its usefulness becomes clear. That makes it harder to defend in a meeting where the immediate question is what another company is doing. That distinction becomes more important as companies grow. Responding to a rival is often easier than making a case for an untested idea, particularly in large organisations where decisions carry greater risks. Schmidt’s thinking suggests that companies should watch the competition without allowing it to set the direction, while staying alert to new technologies, changing needs and opportunities that may sit outside the existing market. Start with the problem: Ask what customers are struggling with before looking at what competitors are doing.