Thoughts on Competition for Early Stage Startups
Photo credit: screen grab from Nike Free Commercial
I was recently speaking with a colleague of my father who works in education and had an idea for a product in the tutoring space. He specifically wanted to know where he could find someone with technical skills to help build out a prototype.
In Silicon Valley, we often take for granted the concept of “ideas don’t matter, execution is everything” and that “your greatest enemy is not the competition, but yourself”. But I think that outside of the tech world and outside of Hacker News, there are still a lot of misconceptions that exist around startups and starting/building a new idea.
So I figured I’d share some of the things I’ve learned about competition that might be a reminder for the experienced, and new to those just getting started in startups.
1) Don’t be afraid to tell people your idea. In fact, speak liberally about it.
When I asked my father’s colleague for details about his idea to get a better sense of what he needed to have built, he hesitated for a second and then told me more about it while stating “of course that everything that I tell you is supposed to be confidential”, suggesting that he was still concerned with people “taking” his idea. While understandable, this predilection for secrecy is mistaken.
The two reasons why you should talk to people about your idea are:
First, if the only advantage that you have is about having some idea that which if communicated to a certain person would give them everything they need to execute and produce this idea, you’re already screwed. You have already lost if the “idea” is the only advantage you have. Most good startup ideas start out sounding like bad ideas so it’s unlikely you’ll even convince anyone it’s a good idea.
It’s also likely that someone has already had this idea and is currently working on it, or has tried it in the past and it didn’t work. Both things were true when it came to Ridejoy. Your idea is not new, it’s the new insight, resources and ability to execute that matters.
Second, talking to people about your idea allows you to uncover new insights and resources far faster than keeping it a secret. We thought we knew a good deal about ridesharing when we got started with Ridejoy but we’ve learned so so much more because we’ve told lots of people about our ideas and gotten interesting insights about the history of ridesharing, or approaches that other people to take into building peer-to-peer marketplaces, or just small anecdotes about their own experiences or their friends experiences with ridesharing – we never would have learned all these things if we kept Ridejoy a big secret.
2) Don’t worry about the competition. You are much more likely to be beaten by the market or your own mistakes.
When you’re trying to innovate in a space that has other players, it’s easy to get caught up in what the competition is doing. Living in Silicon Valley doesn’t help this, all your friends and the press know about the other players and they’re always asking questions like “so how are you different from X?” or “Well, I already use Y – what makes you better?”
There’s a strong desire to quickly differentiate yourself from the competitors, or obsess over their every move. But honestly, it just doesn’t matter. There’s certainly a lot of value in understanding how other players are approaching the market and their products, but it’s far more important to really focus on your own product, your own customers, and how you’re going to achieve your own goals.
When you’re doing a startup, you’re usually tackling a LARGE market, (and if you aren’t, you’d better have a really good reason not to) Large markets mean there should be plenty of new customers/users to go around. Your competition is not “stealing” customers from you. If you are having a hard time getting traction, it’s either an issue with the market (too early, too niche, hard to reach) or with your ability to penetrate this market (weak product, poor distribution). Neither of these things relate to your competition.
As for the advice that I gave my father’s colleague, it was essentially a modified version of the answer I gave on Quora to this question: I have a great idea for a business and the technical expertise to build it. Where should I start? except I skewed even more heavily to the customer development side as it would be even more expensive and time-consuming for him to get something built without a better idea of the exact product he needed and his distribution channels.
So those are my thoughts on competition, especially as it pertains to early-stage startups. I’d love to hear your thoughts on this topic in the comments!