Competition among startups is generally a weird topic. Often new companies tend not to invest enough time in preliminary market analysis while, once launched, they devote too much energy and resources worrying about possible competitors.
In this article we will therefore analyse different aspects related to competition and how to deal with competitors.
1. Deeply analyse the market before launching your project
Before launching your startup, make sure you deeply analysed the market. Understanding potential customers’ needs is not enough, a crucial part of the initial phase consists in understanding who your competitors are.
Who else is dealing with the same issue? Are they startups or large companies? Are they succeeding? If not, why? Evaluating your competitors’ business before launching your idea is paramount: they are indeed a crucial indicator of whether there is a solid market opportunity.
2. Remember everyone has competitors
There are a number of signals that warn potential investors. One of these is certainly when a startup CEO states: “We do not have any competitor. Nobody thought about this before, we are the first!” It’s clear that good ideas always imply the existence of competing projects and, at the same time, that a sound market is based on competition. The lack of competitors could, therefore, signal the lack of a true opportunity.EndFragment
More often than not then, investors are more informed on the business than the startups themselves. This is a tricky situation for founders, who sometimes appear as little knowledgeable.
Try therefore not to say that your company has no competitors: this is indeed one of the worst warning signals for potential investors.
3. Always evaluate past and future competitors
When investors evaluate new opportunities, they do not only focus on the present situation. In the same way, founders of new companies need to consider past competitors (and why they failed) but also future rivals.
One example in this sense is that of startups which invested in AI or augmented reality without fully succeeding. Despite this, many projects focused on these technologies are being launched every day, and CEOs strongly believe in their potential. Although these could clearly succeed, potential investors need to know why it is different today and which conditions have changed.
In the same way it is important to determine possible future competitors, although this is certainly a more complex scenario.
Investors often ask founders what would happen if Google or other large companies went after their market. Although this is certainly a tricky question, it is worth spending some time depicting possible scenarios.
4. Define your added value
After you do an initial market research and you evaluate past and future competitors, you inevitably have to answer the following questions: what is the added value of my startup? Why is it different from all the others?
Founders with some previous experience in the same market generally have better intuitions and tend to envision projects which strongly differentiate from the others.
This market differentiation can be based on the product, if this works differently from those of competitors; on the access to the market, in case the company had control on specific channels; or on sales, if the founder had strong knowledge of his clients.
Make sure therefore you define which is your added value and consequently implement an ad hoc strategy.
5. Check on your competitors, but ignore the “noise”
The majority of founders spend too much time worrying about competitors. We are constantly overwhelmed by facts and news: every day someone launches a new product. If you paid attention to every single piece of news, your life would be a nightmare.
Try to avoid this situation by dedicating yourself completely to the business. Instead of wasting precious time every day, try instead to organize a monthly or quarterly review of your competitors’ new products.
6. Be prepared to see your idea stolen
CEOs often complain about the fact that their idea gets stolen. This is however a common practice; today many companies steal their competitors’ product and integrate on that. Ideas cannot be fully protected, they are simply taken and revised.
On a positive side, as your idea gets stolen, you can be inspired by those of the others and improve your project.
7. Establish a relation with your competitors
Although sharing secrets and intuitions with competitors is clearly not a good idea, establishing friendly relations is certainly a smart strategy. Your competitors are generally particularly knowledgeable about your market, it is therefore always interesting to listen to their perspective.
CEOs inevitably attend events with competitors, and these are good occasions to create a network of contacts and contribute to innovate your field.
You never know, on the other hand, what the future holds. You could decide to start a new partnership or to contribute to someone else’s project. Markets offering good opportunities tend to consolidate, investing on relations with your competitors is therefore a smart strategy.
8. Follow your mind and your passion
Once on the market, you will only compete with your product and your personal approach. Nobody else but you knows exactly what you think and what is your vision.
Your success relies on your ability to imagine the future and to involve your team and clients, together with your product’s uniqueness and business management.
Nobody else will ever be like you, because they don’t see the world as you do.
Successful startups focus on their goals and on their vision, irrespectively of their competitors