Competition Theory and Why Pattern Wins

Pattern is looking for innovators to join our growing team. Specifically, the team I am on is hiring, so I wanted to author a post on why I would recommend anyone work with Pattern, be it as an employee or a brand. 

To start with, I am a scientist. Rather than an MBA, I have an M.S. in Biology. One reason I was drawn to Pattern was that it was very easy for me to draw parallels between my field of Evolution and Ecology and my original role at Pattern, which was vetting potential partners and writing case studies. A significant part of my master's thesis was on competition theory. I decided to write this post in my "native language" of biology about why I think Pattern is the best at helping its' partner brands compete in their categories, and why Pattern will come out on top among the ecommerce aggregators and accelerators.

First and foremost we have to define the Niche: A species' ecological role, which is defined by the set of conditions, resources, and interactions it needs (or can make use of). Pattern's niche, broadly, is ecommerce, but we could define a niche in any number of ways. Marketplace Seller is a niche, Accelerator is a niche, etc..

Within a niche we assume resources are finite. Two of the most prominent principles of competition apply (and apply equally well in business):

• The competitive exclusion principle - Two species can't coexist if they occupy exactly the same niche (competing for identical resources). One of them eventually goes extinct. There are a few of ways species can win in competition but two common methods are: Be an agile competitor (get there first, get all the resources before anyone else can, adapt quickly to changes) or be a strong competitor (win resources over time regardless of how quickly). Ideally a species wants to be both, but realistically they sit along a continuum between the two. Being agile is favorable in volatile environments, while being strong is favorable to more stable environments.
• Resource Partitioning - Two species whose niches overlap may evolve by natural selection to have more distinct niches, resulting in resource partitioning. Think of Darwin's finches in the Galapagos - Darwin observed different beak sizes and shapes that specialized in exploiting different food resources. The idea is that different beak shapes became more prominent over time because the species that evolved to share less resources with other species survived, and the ones that didn't were competitively excluded into extinction.

Partner brands

• Our partner brands coexist with many other brands in their niche. In order to maximize growth, your brand needs to competitively exclude other brands from their niche by being such a dominant competitor that other brands cannot coexist. Pattern helps partner brands do this through many methods, but one that comes to mind is increasing a brand's share of organic search rankings for key search terms in their category. Imagine if your brand begins displacing competitors in search and pushing them to page 2 and beyond. Competitive exclusion in action.
• When competition is more equal a number of among brands we more commonly see brands evolve by intentionally performing resource partitioning. They say "actually our niche isn't exactly the same as that other brand, it's slightly different in 'X' way." Doing so partitions resources (customers). If you think of niche overlap as a Venn diagram, with the overlapping section representing competition for shared resources, resource partitioning serves to pull the two circles apart and reduce the amount of overlap. For example, a vitamin/supplement brand might target a line of their products towards athletes of all ages, whereas another might target the age 60+ demographic. Pattern's team of ecommerce experts and incredible data scientists help brands execute this and other competitive strategies pretty much every day.

Pattern

• Pattern's definition of the "accelerator" niche is a prime example of resource partitioning, They have evolved into their own niche separate from the aggregators (Thrasio, Perch, etc.) and effectively reduced the threat of competitive exclusion. As other sellers brand themselves as "accelerators" they will find stiff competition from the company that defined that niche.
• Often times macro-level changes in ecosystems can cause previously separated niches to overlap again. This inserts an element of stochasticity into competition which is usually very deterministic. As changes in the ecommerce ecosystem occur in the coming years, it may be that Pattern and the aggregators suddenly have significant niche overlap again. But by growing rapidly in our own niche right now we are positioning ourselves for success when and if that happens.

Every win at Pattern is a win for our partner brands and win for our employees. The ecologist in me calls this a mutualistic symbiotic relationship (I'll let you do your own research on that one). We are really good at what we do and we have fun doing it. Come join the party.