Focus on Sub $100 Million Dollar Competitors

One area startups do a poor job with is answering the competitive question “how are you different?” In addition, there’s a tendency to talk about differences compared to mega products/companies (e.g. we’re like SharePoint, Facebook, eBay, etc but do x,y, and z differently). This is nice in that people are more likely to be familiar with these brands but bad for internal focus in that there are so many fundamental differences that it makes it hard to narrow down the meaningful ones.

More often than not startups should focus on sub $100 million/year revenue competitors. Here’s why:

• Sub $100 million competitors typically have a more specialized focus or a single product, making it easier for a startup to ride their coat-tails
• Sub $100 million competitors are still large enough to have a meaningful customer base whereby you can reach and talk to their users, find out where they are advertising, etc
• Sub $100 million competitors are more attainable size-wise and can be more easily emulated, making it more mentally palatable to say “we’re going to beat X”

My recommendation is to focus on differentiating your startup against sub $100 million dollar competitors.