Lesson #36

Beating the Competition Requires That You Know More about Their Vulnerabilities Than They Know about Themselves . . . And Knowing Yourself Better Than They Know You

Politicians and CEOs alike always talk about competition being a good thing, which is really only partially correct. Sure, having others in the same sandbox makes you keeping thinking, testing, and improving. But in reality too much competition in the early stages of a start-up can cause a lot of pain and suffering, and—if you're not careful—might prove fatal.

In the early stages of OfficeMax, particularly the first year or so, we scrupulously stayed away from competitors. Were we afraid of a good fight? No. But we wanted to pick a time and place of our choosing for it. The industry's 800-pound gorillas—including Staples and Office Depot—seemed to carve out imaginary regions of the country as their then-exclusive domains. This gave us (and probably the others) some time to fine-tune and work out the kinks—everything from training, merchandise assortments, and marketing messages to figuring out what the customers really wanted.

Staples started in the Boston area and stayed in New England during the first couple of years. Office Depot began in south Florida and remained in the South. And OfficeMax began in Cleveland and initially stuck to the Rust Belt.

In our first-phase expansion, we hovered within a 300-mile radius of our home base's sanctuary. The reality was that before we had access to Kmart's deep pockets, ...

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