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Ask YC: What to do when the competition surfaces?

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Ask YC: What to do when the competition surfaces?

#1

Post by wheels »

I think everybody who's been through the startup game knows this point: You've been quietly working on something you think is novel for months, planning to take over the world any day now. And then there's the painful moment where you realize there are others doing something similar.

We just hit that. There are two groups, both with unlaunched products. They've got bigger teams. They've got more money.

What do you do? We were tentatively planning on a public beta for the first useful application about a week out. Neither of their groups has that. Should we focus on differentiation or try to build momentum for a head-on collision?

We've been keeping quiet about what we're doing because we're not ready to launch yet, but they've just started breaking radio silence. Should we care? Should we start making noise?

Looking forward to your answers.

Re: Ask YC: What to do when the competition surfaces?

#2

Post by epi0Bauqu »

Don't be intimated by potential competitors--that's exactly what they want. Wait until you think what they are doing is going to actually impact your company before reacting. Continue as planned.

Additionally, the competition might not be all that bad for you. They may help flesh out the market for you. You might be able to ride on their press and their advertising dollars. You might get ideas from their products.

Finally, pretty much all good ideas will attract competition. That is the nature of a free market. So it was going to happen sooner or later. The good news is that there is usually room for multiple competitors in a market. And in the low-cost startup world, I haven’t seen any great evidence that bigger teams and bigger money win out on average after you control for the # of startups in each category.

Re: Ask YC: What to do when the competition surfaces?

#4

Post by V12-Bill »

A proper answer would take a whole book :) You need to find _your_ central idea about what you are best at, what you value, and what you care about. Focus on that. Not! the competition. The competition is largely not relevant, early on. Do what you do best. Don't react to them. Do your own thing! Let the competition find the potholes in the road. You may then avoid the problems that they were bogged down solving. If you have solved the right problems, your value will be apparent. If not, adjust, and repeat :) Don't let the competition define you!

Re: Ask YC: What to do when the competition surfaces?

#5

Post by meredydd »

The rumour mill is a good thing - if possible, it's nice to get a feel for what they're doing, and specifically what they're doing differently. Not, I note, for check-box copying, but to see how your products are going to stack up, and see if you're lacking big-time in one harea.

For my tuppence (although I haven't been in this position yet), launch on time, and make noise. Even if they're making noises, a genuine usable product will speak louder. And even if they launch in turn soon afterwards, as the established service you could well ride the PR coat-tails. Of course, the longer you're established before they launch, the more likely you are to be cited as their main competition when they do launch.

Kiko described this effect wrt Google Calendar here (which is a different take on the story than some I've heard): http://www.height1percent.com/articles/2006/08/18/actual-les...

Re: Ask YC: What to do when the competition surfaces?

#6

Post by kyro »

I'd say launch as soon as you can. Post your product here, digg, etc., and try to get it blogged, and hopefully TechCrunched. Watch Mike Arrington's video at startup school on tips to get your site blogged. Have someone leak a twitter message to Mike about your startup. Good marketing can be done effectively without any money.

With competition on the horizon, launching something less than perfect might be in your best interest, because you'll not only get the first jab at the market, you'll have the ability to iterate based on user feedback so that your product will be more tuned towards users' actual needs by the time your competitors start trying to gain momentum. Differentiation will come as you begin to mold to your users. It's a matter of agility.

Re: Ask YC: What to do when the competition surfaces?

#7

Post by cperciva »

There are two groups, both with unlaunched products. They've got bigger teams.

Sometimes bigger also means much slower.

We were tentatively planning on a public beta for the first useful application about a week out.

Go for it -- your key advantage is that you're faster and more adaptable than the competition, so get your work out in front of users and start adapting based on the feedback you get.

We've been keeping quiet about what we're doing because we're not ready to launch yet, but they've just started breaking radio silence. Should we care? Should we start making noise?

You'll probably get differing opinions here; but personally I've never been very interested in vapour. Don't talk up a product which doesn't exist; instead, put a product in front of users, and let THEM start talking about it.

Re: Ask YC: What to do when the competition surfaces?

#8

Post by ejs »

I would say launch NOW.

I was in a similar situation, I was just plugging away at a site and about 1-2 months before I planned on launching a competitor (with an inferior service) launched. I decided to work as hard as possible and launch about 2 weeks after that.

What a mistake, the competitor always has an inferior site, but I never caught up. I would have been much better off had I just launched and not tried to make things perfect. The users were perfectly content with the competition.

My advice would be to launch first if you can and get the users to market for you.

Re: Ask YC: What to do when the competition surfaces?

#9

Post by jk4930 »

Look at what problems they claim to solve, how and why. Try to assess whether they are conceptually and technically better than you. They have more money than you, what I consider an advantage over a bigger team in terms of marketing (i.e. grow fast). So they will create the market. But now it depends:

When their business model and techniques are inferior to yours, customers won't get stuck to them. You will win them later. So be silent and have no fear.

When their model and techniques are better than yours, customers will stuck to them and you won't get them switch over to you. So make noise and let potential customers know they should wait for a maybe better alternative (that is you).

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