Evaluating and Reacting to New Competitors

What’s your reaction when a previously unknown competitor pops out on the market?

Perhaps they are better funded or staffed with famous entrepreneurs or they announce one or more significant customer deals.

If your prospects are not bringing them up I would continue with Plan A. If you have selected an important problem to solve you will always have competition: no one ever has a market to themselves for very long. Don’t fall into the marketing echo chamber where you respond to their messaging instead of what your prospects and customers are asking for.

More startups are decoyed by competitive announcements and datasheets than you would care to believe.

Not everything your competitor says they can do is true (yet, to give them the benefit of the doubt). If there are no testimonials offered or customer case studies the probability you are looking at messaging instead of reality goes way up. If your prospects or customers are not asking about them then focus on what they are asking you.

Many teams are more undone by their fears and imagination than reality.

This is not to say you should not keep a close eye on competitors and what they are saying: you should always be trying to differentiate yourself in ways that make you more useful and more compelling to your target market.

How did Craigslist drive so many better funded competitors into oblivion? It was not by copying the features in their press releases and product announcements. Same thing for SalesForce displacing an earlier era of sales automation tools. RightNow technologies bootstrapped CRM solutions against better funded but ultimately less nimble competitors.

If the market is well established you cannot take an entrenched competitor head on. Most startups have to fight a “battle of maneuver” where the market is still emerging and you have to identify key opportunities to pursue, these will come as much from actually talking with prospects as reading your competitors announcements and giving up hope.