Entrepreneurship is all about innovation and being on the cutting edge. It’s about dreaming, creating, and doing things our own way. Sound about right to you? Then what would you say if I told you that another aspect of entrepreneurship is being reactionary? Actually, I’m taking liberties with the term. When I was reaching adulthood in the late sixties and early seventies, a reactionary was usually associated with a person who was protesting the Vietnam War and might use extreme measures to do so. To be sure, I’m not referring to entrepreneurs as this kind of reactionary. Entrepreneurs are reactionary in the sense that we are often reactive. What we react to can be make or break for our enterprise. Let’s look at two different aspects of being reactive.

Many entrepreneurs react to their competition. This is evident every day as we watch companies raise or lower prices based upon what they see their competitors doing. But there are many other examples of how this is being done. Company A produces a wearable device that measures the steps taken by a consumer. Company B produces a similar device that measures steps, but it also measures sleep patterns. Executives at Company A become concerned that it will lose market share, so they order the production of an upgraded device that measures steps, sleep and calories consumed. This is the additional “bells and whistles” approach. This arms race continues unabated – we’ve all seen it over and over.

While it’s important to know what our competition is doing, there’s something even more important to which we must react. Smart entrepreneurs react to their customers. Just because Company B produced a wearable device that measures steps, sleep, calories, plays music, allows the viewing of text messages, AND counts the number of black cats that cross our path, it doesn’t mean that their customers really want such features. Rather than participate in the arms race with his/her competition, the smart entrepreneur drills down to understand what customers want and need, and then focuses on producing a product that responds accordingly.

Normally we say that we want to be proactive. We tend to think that being reactive is somehow “behind the curve.” In many areas of entrepreneurship this way of thinking is correct. We may equate being reactive to being unprepared, slow to respond or being a step or two behind. As entrepreneurs we need to be proactive when it comes to our production methods, marketing, and sales ideas, and in all areas of human resources. But being reactive to our customers is just plain good business.

Let’s break this down further. If we are totally and continuously connected to our customers, we are going to know immediately when they perceive issues with our products and services, giving us the opportunity to make the necessary adjustments. For example, maybe we make a thing-a-ma-jig that is blue. But we learn from some of our customers that they really want it to be red. We react and begin making a red version. This is good. Suppose that our delivery time used to be one week and now is two. Our customers begin telling us that two weeks is too long. So, we react and tighten our delivery schedule. This is not good. Why? Because we should know that customers don’t want to wait two weeks for anything – everyone wants everything yesterday. We should have been proactive in this instance and never let the delivery schedule push out to two weeks. Instead, we should have been proactively trying to figure out how to shorten the timeframe from one week to a couple of days.

The entrepreneur who is constantly reacting to his/her competitors is the one who is behind the curve. Always trying to one-up the competition is a dangerous game to play unless it is done in concert with understanding the needs and wants of the customer. And then, the focus actually shifts from the competition to the customer. In the end, this may result in besting the other competitor in the space – but that wasn’t the primary objective.

Being an entrepreneurial reactionary makes sense when we are reacting to what we can do better for our customers. Then we can be proactive in all other aspects of our enterprise.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.