Q) Do you have many successful competitors?
A1) No -- then why isn't anyone succeeding in this space? Maybe it is too ahead of its time but most likely there's a reason no one can make it work. In any case, I'm out.
A2) Yes -- in this case look at how much competition you have, it's too hard to break in now. It's a very crowded space and you won't be able to differentiate yourself. I'm out!
Proceeds to invest a couple months later based on liking the team and seeing who else is investing...
>> based on liking the team
We all know that the idea without an execution is not worth much. It's easier to halt everything by saying the idea sucks rather than saying that he doesn't believe in the founder.
>>seeing who else is investing
Social proof is a huge factor and touches many aspects of every day life. And at the end of the day, investors are humans.
Instead the dynamic is closer to student-apprentice applicants and admission committees.
: "Entrepreneurs Are The New Labor" by Venkatesh Rao:
That being said, it shouldn't take 20-30 hours. If you're looking for it but can't find it, there's something missing with the existing companies (execution, marketing, etc).
But make sure you know everything. Literally nothing kills a pitch or talk quite like not being able to answer the question "So it's like ____?", even if the mentioned startup turns out to be only tangentially related.
If someone is unwilling to perform a thorough search for competition, there is a good chance that the person does not yet understand the problem he is solving or has a wrong idea about what the real problem is.
Part of the reason why it takes long to understand competitive landscape is that search engines are still not perfect, and companies often do not do a good job of explaining on their websites what exactly they do.
If a company exists that is solving the problem and yet you cannot find it, you may call it a problem with their execution, or a problem that you may soon have too -- discoverability/SEO and gaining traction.
They say, ideas are dime a dozen. My understanding is that ideas are dime a dozen only before you apply the filters - product-market fit, competition analysis, etc. If something passes through and correctly so, it is worth a lot more. I bet investors die to see something that has actually passed through.
You're right about the pitch-killing. A few times I've seen investors pull out their iPad during a pitch and google potential competitors. Then they ask the entrepreneur about them if they weren't included.
Of course someone already built your idea. You'll find 30 versions of it just be searching for suitable domain names. Take advantage of that. Your first 30 iterations and pivots are done before you even started!
If you go beyond the Yes/No of instantdomainsearch.com and actually look at what's hosted on the unavailable domain names. Click around the website. Become a customer. This is more useful "market research" than blasting out hundreds of SurveyMonkey surveys or asking people if they'd use your product!
Having an idea and building a solution is innovation, not entrepreneurship. "Entrepreneurs" are business people who take what someone else built and compete with other business people to sell it to the greatest market at the highest margins, then flog the business itself to some sucker just before it tanks. Someone who imagines and builds needs to be quite profound, whereas someone who takes and sells needs to be quite petty, so rarely do you find innovation and "entrepreneurship" in the same individual.
So I would say innovators are bad at finding their competition, which is the "entrepreneurs". Innovators often get a shock at how vicious "entrepreneurs" turn out to be when the product's almost ready. Even before there's a solution built, many "entrepreneurs" roam around looking for innovator victims who happily advertise what they're doing or even posting their software samples online. "Business is war" to the entrepreneur. Anyone in business who's building and trusting instead of stealing and fighting won't last long.
If you're not an innovator you also can't really be an "entrepreneur" since you won't be able to build new features for your product, nor scale your company.
What you're describing is more of an executive/corporate CEO that was hired into the company after a few years down the track I would say.
An example that comes to mind is Eric Schmidt. He's not an entrepreneur at all, he never invented something or created something new. However, he is a full-on CEO. He probably can scale up your company from $10,000 rev to $100M rev like no one else.
Imho entrepreneurs normally aren't good CEOs. They like to create new things, work on the product and usually don't want to bother talking with investors, hiring people or talking to the media.
How many of those search modifiers still work with Google, and does it give the parsing he expects? I haven't seen anyone do a search like that in a decade. I notice that removing the plus gives the exact same SERPs for example.
EDIT: Just tried it, and it does return different results. The search modifier OR seems to work, but the + might not be doing much. I definitely find the search with the modifiers to return more relevant results.
+searchterm has been replaced by "searchterm"
At that point your brain will veer away from solutions that are already well covered and will naturally focus on the fuzzy areas that are being missed. But you know at least that you are dealing in an area that a) you enjoy (this is the most important) and b) your market is validated.
The key point you have to look out for at this phase, is your solution just a feature of some bigger product? In which case, you'll want channel partners / look for acquisition exits. Which, TBH, nowadays is often the easiest and fastest way to exit.
Referencing AngelList and CrunchBase leads me to believe that this article is applying only to startups that compete with other startups but it is ignoring the bigger opportunity of changing existing markets.
I reference CrunchBase and AngelList not because it's only startup-startup competition, but it's a great place to look for new entrants that you often won't find through Google alone. If there are major incumbents in your space, you should find them with that initial google search.
I'm trying hard to learn to getting to know the competition and appreciate it but it can be very discouraging to find out that your killer app is just another player in a saturated market. Nevertheless, I feel that I'm more honest with myself if I do a competitive analysis very early on; even one that takes a few minutes is incredibly useful.
Some others may be nimble enough to add whatever your killer feature is. But their management team or investors may want to keep with what works and not vary from that path.
Point is some companies are in different points of their life cycle. I think it is good to know who the players are but to use your own product vision to guide you. If you have no product vision and your goal is to just copy, well good luck with that. Why a product is built a certain way isn't something you can always figure out.
This line resonated with me. I know the stomach-dropping feeling of someone mentioning a potential competitor that I've never heard of. I usually play it off and say, "Thanks, I'll definitely check it out" and then immediately Google it on my iPhone as soon as possible. Luckily, in my research I haven't found anything all that similar to what I'm working on.
This brings up a corollary question: Assuming I have a pretty well-informed view of the competitive landscape and I can't seem to find anything that solves the problem in a similar fashion, how do I sufficiently answer the inevitable question from investors about my competition? I've often heard people write and say that business ideas ALWAYS have competition, the tricky thing is that the competition isn't always immediately obvious. Answering that a startup doesn't have direct competition leads to skepticism, therefore creating distrust right off the bat when it may not be warranted.
I think it's worth finding the closest competitor no matter how far away they are, even just to signal that you've done the research.
Competition is also not a bad thing. If there are a few startups vying for attention in a certain space, it means there's obviously value there. You have to prove to investors and customers that you're going to do it better and ultimately win the lion share of the space.
1) How you'll beat the competition
2) Why people will want your product
Are you sure you shouldn't be focusing on 2?
"The last thing you want is to find out that hundreds of other people have already thought of it and Andreesen just backed three of them."
This is a pretty naive point of view. Who cares if they are all startups.
Spend the time and energy this post recommends spending on your competitors and direct it towards your own customers instead.
Also see #4 here: http://paulgraham.com/startuplessons.html
My own thoughts is that the competition turned out not about features, but community. One might have thought Digg had a big leg up, because they basically had Kevin Rose using his role on Tech TV to promote it. However that was also a disadvantage. Eternal September is the death of most online communities, and they brought it on themselves. Reddit fortunately had pivoted to a platform for communities (sub-reddits) so as they picked up steam, the bad network effects were mostly concentrated to the default subs.
In my experience, "We don't have any competition" usually translates to "We are so differentiated from the competition that it effectively isn't competition." That's more often than not an unrealistic conclusion, but the reasons an entrepreneur might favor such a conclusion are fairly obvious.