What To Do When You Hear About New Competition

As a Founder and early employee of startups, I cringe whenever someone hears what I’m working on and responds with any of the following:

“Oh yeah, that sounds a lot like Startuply.com”

“Hmm, have you heard of Startuply.com, sounds like it does what you guys do”

“Oh so this is like Startuply.com, right?”

It’s easy to understand why we feel bad when we learn of new competition. We have poured our lives into a venture, and in addition to the 1,000 reasons why our venture is already doomed to fail, now we have to add another, the threat of competition. Let’s not rush to that conclusion.

I’ve learned to first relax, and then follow this simple process:

1. Thank the person — do not immediately defend your startup. Your friend really is trying to help or understand what you do by bringing this to your attention.
2. Add the company name to a list of competitors you maintain internally.
3. When you have time (it’s almost never time when the conversation happens), spend 20–30 minutes writing down in that list what the company does, what their angle is, and then…
4. Write down why your approach will win
5. Take an extra 15–30 minutes to see if the competitor has great copy you can borrow inspiration from (do not plagiarize!) and see if there are any amazing features you should be offering but aren’t.
6. Prioritize the above as you would any other feedback about the company, and…
7. Move ON!!!

Crucially, we should not spend a lot of time on any of this. Why not? Here are the non-obvious truths we have to recognize about competitors:

1. Most markets are not winner take all. Consumer and business interests vary dramatically, and what matters is that your approach is great for your target market. It’s a lot less important whether a slightly different approach is great for NOT your market. Amazon.com and Walmart.com and Target.com co-exist.
2. As has been documented in so many other places so eloquently, we win by delivering value to our users against real world problems, not by replicating a matrix of features collated from our competitors. Solutions to problems win, not individual features.
3. Excellent execution is required to win, which is the hardest part of entrepreneurship. Focus on doing that excellently and keep the competitors out of sight and out of mind other than these quick bursts of research to catalog if there is anything you should know. For all you know, their investors are scattering, customers are angry, their CEO’s latest scandal is about to hit the newswire, and everyone hates working there so attrition is through the roof — also they are out of cash. But really, this isn’t that much of an exaggeration.
4. If you are only just now hearing of this “competitor,” and you weren’t deterred previously by their presence, that suggests they are not that prolific yet. Nothing stops your startup from being the prolific one at this point.
5. Companies are born every day to fight Goliath and they win every day, so even if you decide the competition is real, it’s still not over. Goliath moves at glacial speed and stifles innovation. Choose the enemy’s weak point and punch through.

I hope you’ve enjoyed my brief guide to being zen about competitors.