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Antitrust may be defined as “a type of law or rule that protects fairness and competition in business.” In an organization, antitrust issues often come to the fore during one-off events comparable to a merger, acquisition or public offering. However, violations may occur over time and constitute a pattern of ongoing behavior.
For a start-up at an early stage of development, the subject of antitrust law could appear distant. The concept of preparing for a legal takeover or unfair competition could appear ages away, especially as immediate issues like fundraising, going to market and money burn take precedence. Survival efforts naturally take priority.
The reality, nonetheless, is that ignoring antitrust enforcement early on can prove detrimental to growing corporations in the long run when rather more is at stake. In fact, ignored antitrust issues often reveal critical gaps within the marketing strategy itself. Future breaches are rooted in decisions made (or not made) early on and continued over a time frame. Once they arrive to the fore, their preventable consequences can exponentially limit an organization’s ultimate success.
While early-stage corporations proceed to struggle with limited performance, there are critical and actionable practices that may be taken to scale back the danger of catastrophic breaches in the long run. There are 4 key steps early-stage founders must take to deal with antitrust issues that can help refine the corporate’s goals and vision while establishing often-overlooked barriers to protecting the corporate over the long run. To illustrate this more directly, let’s use the case study of an entrepreneur who built an organization producing and selling “self-cooking hot dogs”:
Imagine an entrepreneur who invented a hot dog that completely cooked itself exactly when the shopper desired to eat it. No grilling or cooking equipment is required; Just press the button and after three minutes the dish is perfectly cooked. Here are the steps an entrepreneur should consider regarding antitrust laws:
1. Identify your core competitive advantage
This is something that your organization can do and that only a few (or nobody else) can easily replicate. For a hot dog entrepreneur, this could be a technology related to the flexibility to cook your individual food, for which the entrepreneur should consider applying for mental property (e.g. a patent) before it appears in the marketplace. Any attempt by an existing hot dog manufacturer to duplicate this technology would either prove difficult or could cannibalize existing sales of “regular hot dogs.”
2. Highlight how your competitive advantage helps customers
In antitrust law, the law favors and supports competitive benefits that lead to advantages for consumers (e.g., price, convenience, quality). On the opposite hand, problems can arise with competitive benefits that give the corporate a competitive advantage but either don’t help or harm consumers. For our hot dog entrepreneur, basic innovation saves consumers time, money (in energy), and potentially the shame of not knowing how you can cook a hot dog. Clearly and consistently articulating these advantages in all facets of branding might help an entrepreneur on each the business/marketing and antitrust fronts.
3. Execute your plan to defeat the market leader
One of essentially the most common pitfalls for startups is that the present leader of their particular industry has a status or other lasting advantage that they’ve built over time, which prevents the entrepreneur from gaining significant traction. For example, customers could also be vulnerable to the analogy “if it ain’t broke, don’t fix it.” In the case of our revolutionary hot dog, the fundamental limitation will be the proven fact that the cooking process itself is enjoyable for patrons or the natural skepticism towards purchasing a brand new product for consumption from an organization that nobody has heard of before. To overcome these barriers, a hot dog entrepreneur may have to conduct a “blind taste test” campaign or perhaps partner with one other company known to supply products used for grilling. Over time, as a brand new product gains greater mainstream acceptance, it would grow to be easier to achieve market share (and maybe financing) quickly.
4. Identify the social profit related to success
Since most consumers are related to younger generations, a standard success tactic is to convey the message that the corporate is interested not only in getting cash, but slightly in improving a worldwide social problem. A hot dog entrepreneur can deal with the proven fact that his innovation will reduce expensive and/or harmful types of heating energy. You may donate food products to those in need who shouldn’t have access to heating devices.
A deal with antitrust law accelerates all of those efforts and, when successfully implemented, provides natural and compelling protection against future problems. Addressing them early not only protects against future risk, but additionally higher defines the corporate’s current competitive advantage, thereby ensuring stronger success in each the short and long run. While seemingly a risk-averse practice, addressing antitrust issues can actually prove to be a key think about setting the roadmap to successful and sustainable business growth.