
Ask HN: Founder's tactics crossing the line? - pshin45
I won&#x27;t name names, but a YC alum runs a company that is in direct competition with a company in 500 Startups&#x27; latest batch.<p>500 Startups just had their Demo Day this past Wednesday, and the non-500 competitor managed to &quot;sneak in&quot; to the Demo Day to (allegedly) &quot;snipe&quot; their competitor&#x27;s pitch and their competitor&#x27;s interested investors.<p>The competitor then bought ads online for anything related to 500 Startups, to leverage the increased press surrounding Demo Day and the latest 500 Startups batch of companies.<p>What do you all think? Is this a &quot;dirty&quot; tactic or does it qualify as an aggressive but clever &quot;hack&quot;?<p>P.S. Reminds me of this recent story on Uber (&quot;Uber rival accuses car service of dirty tactics&quot;) that was on the front page of HN:<p>https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=7115177
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rexreed
If your biggest competition is an un- or under-funded, not yet widely known or
used startup, you've got bigger problems than that startup. I find it amazing
that startups will consider other startups their main competition, when the
reality is both startups need to focus on the larger untapped market rather
than think that each other is stealing each other's non-existent business.

Another way to put it: If the market is really that small that one small
startup can take away business from another small startup, then you don't have
much of a market at all, and you should find a larger market.

Anyone who goes to such extents to snipe a startup really doesn't understand
what it takes to gain market traction.

But it sounds like in this case, one startup wasn't really looking to snipe
another startup, but rather capitalize on the press that would (potentially)
be generated from that startup's launch. This happens all the time in other
industries. Whenever Apple launches a product a myriad of other companies
piggy-back on the press Apple generates. It's smart marketing.

It would only be underhanded if the startup was making false or disparaging
claims about the other company in public. And that's borderline libel /
slander anyways.

~~~
wdewind
> Another way to put it: If the market is really that small that one small
> startup can take away business from another small startup, then you don't
> have much of a market at all, and you should find a larger market.

This is true but not the entire picture.

It is extremely common for the VC community to de facto agree on a leader of a
space. Markets are frequently interpreted as winner takes all, despite the
reality that almost none are. Once a winner has been agreed to it can be
extremely difficult to raise funding in the same space.

~~~
beat
Really? There's equally valid conventional wisdom that's just the opposite -
that it's easier to get funding if you do a slightly-improved knockoff of an
existing popular startup (consider all the Groupon knockoffs).

~~~
dhoulb
Name five...

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mikeryan
Lets boil this down. The only thing this competitor did was;

 _The competitor then bought ads online for anything related to 500 Startups,
to leverage the increased press surrounding Demo Day and the latest 500
Startups batch of companies._

This is marketing 101. Go where the action is. I find nothing dirty or
underhanded about this and its a far cry from what Uber was doing which was
directly impacting their competitors.

~~~
aspir
It's definitely underhanded and classless. It would be like a MSFT
infiltrating an Apple demo and trying to upstage Tim Cook.

But, at this point, we're arguing values and philosophy, and nothing's going
to come of it :)

~~~
argonaut
No, it's not like that. The only thing the OP indicates happens is the
infiltration part, not the upstaging part. I'm pretty sure MSFT sends people
to Apple demos whenever possible.

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andykmaguire
This move is unethical for a very clear and straight forward reason. Demo Day
at 500 Startups is "invite only". The YC company was not invited. People are
invited for very targeted and strategic reasons. Information will get out,
intentionally via press and investor conversations, but the timing is a
critical factor.

The group is larger, but the logic is parallel to pretending to be an investor
to hear a competitive startup pitch for capital, or sneaking into an internal
team meeting at the competition.

It is a move without class.

~~~
dhimes
This is the right answer. Right now it's quite far down the page, so I hope OP
sees it.

Think of it this way, OP: if there was nothing wrong with it, then the person
doing it wouldn't mind being outed, right? So, out him or her and see what
happens.

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WestCoastJustin
> _" Founder's tactics crossing the line?"_

No. Demo days are where you share _semi-publicly_ your product with investors,
other startups, and hopefully media. What is to stop an investor, or other
startup, from sharing your demo with anyone? This might even be considered
good form, for someone to give the YC alum a heads up, that "Hey, XYZ, is
going after your market".

In terms of keyword marketing, I think this is a well known and understood
tactic. If your idea/startup is so fragile that someone can market a couple
_keywords_ and kill your company -- you have much _BIGGER_ things to worry
about!

~~~
nholland
eh... doubt it had much impact on anything other than just annoying everyone
who spotted it. The companies will shake out as they execute.

The bigger question is the DBA (don't be an asshole) philosophy. If you're a
fan of mercenary mantra with no rules of engagement, so be it... but you're a
jerk. If you win, you get to be a rich jerk. Otherwise, just a jerk.

I recently met the CEO/Founder of Stripe - he was awesome, crushing it, and
talked at length about doing the right thing by his people, the world, etc.
He's a rich guy that won by kicking ass - not by screwing with other people.

So if you like to be a jerk, create animosity, and contribute to the general
consensus that the Valley is about F'ing with each other... then rock on.
Otherwise, why not follow the DBA rule and focus on winning investors and
customers the old fashion way - being awesome.

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aspir
I'd consider it extremely underhanded, but it's definitely legal. Actually,
you should be thankful that you saw this now -- you know what your
competitor's values are, and what they may do in the future. I've been at a
few startups across a few industries. In some, the competitors didn't care
about each other, and everyone played by themselves. In others, we saw tactics
similar to what OP describes.

You now know which bucket you're in. Plan accordingly. Don't put on your
tinfoil hat, but keep this in mind going forward.

I'd also recommend bringing this to 500startups. I wouldn't consider them at
fault here, but they should know that this happened to one of their companies.
They should see if there's anything they could do in the future to curtail
this. "Demo day" startups are at the most vulnerable point of their lifecycle,
and something like this adds unnecessary complication.

~~~
nholland
It happened to the 500 company - they didn't do it :) And it wasn't YC... just
a YC Alum (they should know better)

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jsonne
Unless they were lying about their competitors or spreading malicious rumors I
would say this is fine. Welcome to business, people are going to claw their
way to the top with whatever legal means they can. I would think that, if
anything, 500 startups should do more diligence on the people attending their
pitch day to prevent this from happening.

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pbreit
Doesn't sound too dirty and not that similar to the Uber matter. By "sneak in"
you mean "got invited"? And advertising against "500 Startups" doesn't sound
very effective.

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rooted
500 Startups Demo Day is hardly invite only - I attended once and had the
option to buy a ticket to attend demo days. The slides are publicly available
anyways. Unless they were impersonating you when talking to investors this is
irrelevant.

Buying Adwords on things related to 500 is definitely aggressive, but well
within the lines of fair play. If this is actually hurting your startup then
both companies need to reconsider the size of the market they are in.

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argumentum
Seems like a vague story. Nothing is obviously underhanded even if true.
Moreover, it's not actionable in any sense.

It's too early for customer impressions to shaped by bad press, not important
enough to put off early hires and not relevant to investors.

More importantly it sounds like just a he said / she said type of thing.

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mathattack
My guess is this will get killed. The owners of the site don't want it to
devolve into complaints for or against existing companies when there are other
forums to do that. (If it were allowed, that's all people would talk about,
and it's not a customer service or investor relations site)

~~~
bdfh42
No - it will only get killed is someone identifies or guesses the YC company
or founder.

~~~
pfraze
Sorry, I accidentally downvoted you

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AnimalMuppet
Well, one of YC's guidelines is "don't worry about your competitors". This is
a guideline for practical rather than moral reasons. Worrying about your
competitors wastes your time and energy.

So (dodging the moral and legal questions), this behavior may be
counterproductive.

~~~
dquail
I'm a big fan of the "don't worry about your competitor" mantra. But at the
same time, it'd be silly not to pay attention and to learn from your
competitors failures/successes. Doing so, IMO is quite productive.

~~~
NhanH
You can pay attention but not worry. The two are closely related but not the
same thing :-)

~~~
dquail
Totally agree. I think we're saying the same thing (that was my intent anyways
:|

~~~
NhanH
Sorry, I thought you was conflating worrying with paying attention. My bad!

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Stronico
Bad for the company - good for the investors though - it's probably a wash.

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j_s
No one here is going to call this crossing any lines. Ask Airbnb, Uber, etc.

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xiaoma
If they truly did sneak in, it sounds like a clear case of trespassing and
theft. Report the crime.

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Fasebook
Will he make more money? Lets see what happens..

~~~
teddyh
Money earned is not a measure of morality.

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sheetjs
It's a hack when a YC company does it, but it's a dirty tactic when anyone
else uses it to the detriment of a YC company.

This is, after all, a site sponsored by YC.

That being said, I'm surprised this conversation wasn't junked

