
Why Investors Won’t Talk to Competitors - jheitzeb
http://www.danshapiro.com/blog/2012/08/why-investors-wont-talk-to-competitors/
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jheitzeb
Great post. Just a thought to add to the reasons: at least some investment
firms approach markets proactively and will work hard to identify emerging
market opportunities and seek out the early innovators and strong teams --
especially in areas where there are first mover advantages. Their strategy is
to identify the strongest team and earliest leader in the space and fund it to
help it move fast. By definition if a company wasn't on their radar months
ago, it is behind the curve.

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danshapiro
On a related note, if an investor with a competitive investment comes a
calling, their motives may be less than pure.

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krickle
If you've disabled Javascript on your mobile device, this website will overlay
an opaque black square over the content. A note to danshapiro.com -- when you
are needlessly restricting your viewers from accessing your website for
arbitrary reasons in this way, you should limit the size of the box holding
the content, as I was still able to read the majority of your article.

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danshapiro
That is crazy. It's apparently the default behavior of a WordPress plugin I'm
using, ostensibly to make the site more readable on mobile. Thanks for telling
me.

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danshapiro
It's WPtouch - that behavior is inexcusable. I've disabled the plugin so you
shouldn't see the problem any more (although it will also not look quite as
nice on mobile, unfortunately).

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krickle
Thanks for taking the complaint seriously :) I quite enjoyed the article but I
have knee-jerk reactions when sites do this.

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sudonim
Helpful to understand what the responses mean, but what should you do when you
hear this? Do you say:

Can you introduce me to someone who would be better suited?

OR

Thanks for your time!

How should an entrepreneur handle this response?

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danshapiro
Let's think through this conversation: "Bob, let me introduce you to
footwear.me." "Are you an investor?" "No, I invested in shoes.tv because I
thought they were the best company in this space."

It's going to be a really lame intro, probably worse than if you cold-called
the person. So unless you're desperate, I wouldn't ask.

A better plan would be to pump _them_ for competitive information. "Oh,
shoes.tv! They're really neat. What was it about them that made you pull the
trigger on the investment? Do you think that footwear companies are hot right
now? What other companies did you look at? What do you think of their product
so far?" If you're friendly and open, you might get some useful (non-
confidential) information about the space, and how investors in the space
think about it.

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webwright
This might be different for seed stage folks, accelerators, etc. YC, for
example, would quickly run out of markets if they avoided potential
competitors. Also, pivots happen a lot early, so you see early stage companies
oftentimes _become_ competitive after the investment. There are good ways for
investors to deal with this... See Andreessen Horowitz and Instagram/Picplz:
[http://thenextweb.com/insider/2012/04/23/ben-horowitz-on-
why...](http://thenextweb.com/insider/2012/04/23/ben-horowitz-on-why-
andreessen-horowitz-backed-picplz-and-still-stands-to-make-78m-from-
instagram/)

