I just had this very epiphany today. After being rejected by two potential investors because of that reason ("Have you heard of X?"). It's frustrating to say "Yes, I have, and here is why we are different", but still get written off. The investor seems to stop listening after the "Yes", which stinks especially since the main problem I see with Company X is that no one is using it! (They are very loud and in the press, so it gives them an appearance of dominance). So, I will definitely try using that answer next time, if only to force the investor to realize that while the idea is out there, it hasn't won yet.
Perhaps you should start off your pitch with "Why no one actually uses X."
We have a similar problem in research, where we have to always demonstrate that what we do is novel. A technique that I have taken a liking to is to talk about all of the related work as soon as possible, so we can distinguish ourselves immediately. The difficulty with only distinguishing yourself at the end is that your audience has been bearing a "someone has already done this" grudge the whole time. It's difficult for them to let that go, no matter how good your answer is.
edit: I just looked at the page for your startup, and it wasn't immediately obvious to me that your site is a place to find classes out in the real world.
Perhaps you should start off your pitch with "Why no one actually uses X."
Yes and no. I'd maybe try to rephrase that to something along the lines of "I've looked through their site and I haven't seen any evidence of them attracting users". Dismissing a rival with "meh, no-one uses it!" makes it sound like you haven't really considered the competition.
Your evidence that "no one uses X" is point number two. It is support for your first claim, which should be upfront. And the fact that you have a list of damned good reasons why no one uses X should help them get on board with your point - that is, after you've made that point, they should be thinking "Yeah, I can see why no one would use X." Then you present the evidence that no one uses X.
And if you don't have a list of damned good reasons why no one uses X, then they shouldn't give you any money.
True, what I wrote initially would seem arrogant in a vacuum. In a fuller discussion, I would cite their main actionable metrics that I've kept track of and show that there is no organic growth occurring. Then I would show what we are doing to make that actionable metric grow.
BTW, I don't waste too much time concerning their success (just a once a month check) especially since my company's success is most important. No one asks "Isn't your company just like X" when you are winning :)
I went to your site Knackeo. I have a tough time seeing what you are doing by going to the site and clicking all workable buttons. I'm sure investors did that too before meeting with you.
A really simple graphical explanation about who pays what might work? I really don't know, but what does peak my interest is that it seems like it will be a variety of crazy stuff rather than another lesson in math.
I liked the comment that you should start your pitch with what others are doing and how you will address a different market or beat them in their own market.
This stuff is obviously really tricky, but I feel like you have something you just are not showing.
