Being emailed a funding announcement about your direct competitor by 5 different people is not the best way to end the day. That’s exactly what happened to me last Wednesday, when one of our competitors announced another funding round from some of the Valley’s most respected investors.
Personally, I’m not as worried about it as every one thought I would be. I’m actually happy for them and wish them well because over the last two years I’ve learned that competition is an essential part of the startup journey. The reason why I am not upset is because another startup is not who we are fighting on daily basis at Rentabilities. Our main opponents are apathy, inertia, and the status quo.
Having competition is actually good for your startup. It means other smart people have identified your market has issues, and it’s worth their time and money trying to solve them, which probably means if worth your time as well.
VC funded competitors may be good news as well because VCs are generally good at identifying opportunities, and by investing dollars in your market, they at the very least are validating you also have a decent opportunity to make money. If you are looking to raise money too, you now have a decent story where another startup raised funding from a respected firm, and you should merit investment as well because you are better for x, y, and z reasons.
Like most founders, I’m fiercely competitive, and I want to win the market and change the world, My primary focus is on beating the market though, not beating a specific competitor. If we outperform every other startup tackling the same problem on every metric, and that isn’t enough to win the market, we still lose. The motive to do well with your business should not be driven by the desire to beat the competition, it should be driven by the desire to solve your customer’s problems.
In actuality, the founders of competitive startups are probably the few people who really understand the struggles you persist through on a day-to-day basis. A few months ago, one of our competitors moved out of the rental industry to pursue other opportunities. Our teams swapped stories about the market via email and realized we had mostly the same challenges. It’s refreshing to know that we aren’t the only ones struggling through the trough of sorrow in order to bring the rental industry online.
When you’re paranoid about competitors, you’re not paranoid about customers
I do think it’s important to stay on top of industry news and be knowledgeable about competitors , however, it’s a detriment to your startup to focus more on your competition than your customers. When you spend your time discussing with your cofounder what another team may be working on, you are not spending time discussing how to make your product better. Only the paranoid survive, and the survivors are most paranoid about creating an amazing experience for customers.
No one will solve the problem quite like you
Your competitors do not have the same backgrounds as you, so chances are the solutions you design to solve your customers’ problems will be dramatically different. On the small chance that another startup happens to build out the exact product you’ve envisioned, that’s actually a good thing, because now that the product you wanted to exist exists, you can move onto something else and make the world an even better place. The goal of any startup should not be to get rich, it should be to enrich the lives of your customers.