A VC in Vacationland

My founders are often overly concerned and troubled with the concept of 'competition'. That's when I tell them to respect all, but fear none. Why?

First, you can never really know who the 'competition', however defined, might be. Is it one of the global giants, a company from China, or a new start up? One's response would vary greatly, and spending a lot of time worrying about it does not advance your metrics.

Second, you can never really know what the 'competition' might have in mind. Are they looking to snag your customers with a new technology, make marginal improvements in their existing tech to better compete with you, partner with another product to make themselves more competitive? Again, many possible avenues and trying to develop a strategic plan to deal with all contingencies will be a waste of time.

Finally, what do you current and prospective customers tell you? Are your products beginning to lag behind competitors, are they unhappy with your service levels, or are you being out sold in the market? Here's where you should spend your time doing competitor research, not trying to guess where someone in R&D in a 'competitor' might be dreaming up.

Your best knowledge about the competitors will come from your customers. Any strategy should evolve from customer input, aided by judicious analysis of what close competitors are doing in the marketplace. Start ups should not devote a lot of time to competitive strategy. After all, they are the disrupters and should continue to disrupt with creative products that better deal with customer pain points, rather than worrying about whether competitors can catch up…