Spreading FUD is a common tactic from traditional, old fashioned enterprise technology companies. Fear, uncertainty, and doubt (FUD) combined with patently false claims (e.g. the product doesn’t do X when it clearly does) are a way for companies to try and persuade a prospect that the other product and company are inferior. Startups with integrity and strong values don’t participate in slinging mud and prefer to stay above-board by focusing on solving customer problems instead of putting down the competition.
Here are some ways companies spread FUD about their competition:
- Cite things the product does or doesn’t do when two minutes of web research show the truth
- Talk about lack of funding or institutional investors in an attempt to imply that money makes a company successful (what happened to Webvan?)
- Provide anonymous quotes claiming to be from customers that switched products
Sales reps that spread FUD act like used car salesman in the worst of ways. Startups and sales reps should focus on solving customer problems and not putting down competitors.
What else? What do you think about startups that spread FUD?
David Cummings on Startups 
David,
Good and cogent points, as always. FUD isn’t limited to startups, by the way. In my experience, FUD has a some other major disadvantages:
1. It has a nasty way of coming back around to bite you. At a minimum, it encourages your competitors to sling mud back.
2. It sets a precedent for a corporate culture that tolerates dirty dealing and scheming.
3. It often generates the same reaction as saying something bad about someone behind their back, “Gee, if he’s saying that about them, what’s he saying about me?”
Richard
Thanks Richard. Great points about the major disadvantages.