One area that I don’t spend too much time worrying about is competitors. Most markets are not winner take all or winner take most such that there’s the opportunity for several successful companies to emerge. Email marketing is a great example of a market without winner take all/most (see email marketing companies with 100+ employees). Instead of worrying about competitors, I do think it’s worth tracking them for a few reasons:
- Having competitors is important to validate that other people believe in the idea
- Competitors provide a proxy for the level of market development (look on LinkedIn to see how many employees they have to get approximate company size)
- Investors in competitors show the venture firms that care about certain markets, and provide third-party validation
- Analysts that cover competitors can also provide reports and insight as well as segmentation
Competitors are a necessary part of the startup world but should not be obsessed over. The best thing to do is to stay close to your customers and provide a great solution.
What else? What are your thoughts on startups and competitors?
Startups have no control over competitors. I recommend a quarterly check in with the competition to ensure your business remains differentiated. Startups are better served focusing on customers.
Really good piece. As I was absorbing the content I got to thinking that without competitors, it would be really tough to pick your own niche space in a market that you want to get penetration into. Thanks for blogging it!