When bigger competitors help
For a small company in an unfamiliar category, larger rivals can bear the cost of teaching buyers before differentiation becomes decisive.
Developed from a conversation between Pete Winn, Anthony and Andy David
A small company may benefit when larger competitors enter the same emerging category. Before buyers can compare products, they first need to understand what the category does and why it matters. Repeating that explanation across a market takes attention and resources that a smaller business may not have.
Anthony saw this dynamic at a small Perth company working on AI that surfaced incidents and interesting events from security-camera footage. The company could not educate the market by itself, so it welcomed bigger competitors moving into the area. Those rivals could spend their own resources making buyers familiar with the product category.
Once customers understood the category, the smaller company could enter with a more specific proposition. It had a unique offering that the bigger players could not provide. The competitors had therefore done useful groundwork without removing the need to compete. Their scale created market awareness, while the smaller company’s distinct capability gave buyers a reason to choose it.