Ask HN: A Well Funded Competitor Has Launched Before Me What Should I do?

#1

Post by sadasdad324 » Sat, Aug 27, 2011, 1:03 PM UTC

Hey Guys,

Obviously using a throwaway account but, I'm a well respected member on here with a few thousand karma (just to give you abit of info who I am).

Anyway, I'm in the process of creating a startup however, a well funded competitor has recently launched - a few million in VC funding with a strong team

I am just wondering what I should do knowing this competition is now around. I am aware of other similar competitors (although this is a new niche/spin on it so they aren't outright competitors) but this one was right out of the blue.

What should I do?

Re: Ask HN: A Well Funded Competitor Has Launched Before Me What Should I do?

#2

Post by g-garron » Sat, Aug 27, 2011, 1:16 PM UTC

Well, that is a really hard question. I think you should consider this:

- Do you have any way to make your company different? - Can you contact some respected member of the niche your company is aiming at, and convince him to start using your product, and endorse you?

Usually smaller companies can offer a better service, to a smaller niche of users, so you can focus in a small sub-niche of the customers, and work with them, that can work for you if you manage to stay small, bigger companies can't afford working with small customers, as they can't break the even point of revenue.

Try to stay out of any strategy that involves money, as your competitor has more resources than you. Focus on personalized service, if you can afford that.

Or, start looking for a funding partner.

Re: Ask HN: A Well Funded Competitor Has Launched Before Me What Should I do?

#3

Post by dwc » Sat, Aug 27, 2011, 1:29 PM UTC

Too many times I have stopped making something because well-heeled competitors showed up before I launched, only to see someone else come in later and eat their lunch. Maybe it could have been me eating their lunch, but now I will never know.

If they really are nailing the market then maybe you shouldn't bother, but usually you'll find they are doing an ok job but missing a LOT of things you might do better.

Re: Ask HN: A Well Funded Competitor Has Launched Before Me What Should I do?

#4

Post by SeanNieuwoudt » Sat, Aug 27, 2011, 1:35 PM UTC

Hey there,

Firstly, don't be too concerned man. Watch the competitor to see how the market reacts to them. If they succeed, chances are better that you will too.

Keep in mind that lots of VC money does not necessarily mean a successful run.

First to market is a bit of a myth, you can do just fine if you don't get there first - just do it better than the rest.

Best of luck with your venture!

S

Re: Ask HN: A Well Funded Competitor Has Launched Before Me What Should I do?

#5

Post by brackin » Sat, Aug 27, 2011, 1:35 PM UTC

I stopped working on a startup as a similar thing happened to me, one year later they've had no traction and could have probably beaten them as I thought we had a much better solution. Don't think about anything other than is your solution better. They are still an early stage startup. Foursquare essentially beat Facebook places.

Re: Ask HN: A Well Funded Competitor Has Launched Before Me What Should I do?

#6

Post by jpdoctor » Sat, Aug 27, 2011, 1:38 PM UTC

> What should I do?

Compete.

Every startup should expect a well-funded competitor to hit the space, both before and after.

Re: Ask HN: A Well Funded Competitor Has Launched Before Me What Should I do?

#7

Post by Terhorst » Sat, Aug 27, 2011, 1:40 PM UTC

If they are very successful and generate a lot of buzz, it may actually work in your favor to be the next alternative in line. If there's a lot of hype, their company can only be purchased once, but many may want to.

Of course, it's better to be #1 yourself, if you can manage that. But I don't know how much I would worry about competition.

Re: Ask HN: A Well Funded Competitor Has Launched Before Me What Should I do?

#8

Post by jefft » Sat, Aug 27, 2011, 1:40 PM UTC

Don't worry about competition. It's a good thing. It means you picked a good market. Focus on what makes you different and better.

Sounds like you may be a single founder. If so, find a friend or mentor who can help you work through the ups and downs. You're going to be discouraged a lot starting a business.

I went through a similar situation and solicited advice. Lots of people told me "know when to quit." I didn't, and I'm glad I stuck it out.

Re: Ask HN: A Well Funded Competitor Has Launched Before Me What Should I do?

#9

Post by ramiyer21a » Sat, Aug 27, 2011, 1:41 PM UTC

Hey,

Do you really know the competitor has the new product? Or is it just a press release. Many times, big companies do press releases of something or the other being released in the next quarter. That "next quarter" never arrives.

The important question is "more than the product do you have paying customers?" If so, don't worry. If no, worry!!!

Re: Ask HN: A Well Funded Competitor Has Launched Before Me What Should I do?

#10

Post by sandGorgon » Sat, Aug 27, 2011, 1:47 PM UTC

Why not raise funding ? Given that your competitor has already raised funding, atleast you wouldnt have to convince investors about the viability of the concept.

If you were looking to bootstrap yourself and avoid dilution, perhaps it is time to rethink that strategy.