By Will Weinraub
It’s one of the most frequent questions an entrepreneur gets asked, *“So, who’s your competition?”*The responses that usually follow are answers that, unfortunately, are just as frequent.
The most common variations run from,*“Currently, we don’t have any competition,”to,”We are the first company doing this,”*all the way to my personal favorite, “There is nobody doing this, in the exact way that we’re doing it.” (Yikes!) The truth of the matter is you have plenty of competition and that competition stretches across more areas than you can imagine.
For starters, most companies have two different types of competition: Direct Competition vs. **Indirect Competition.**You could write a pretty lengthy essay comparing and contrasting these two types, but here’s a quick overview:
- * Direct Competition: Competing for the same market of people by offering virtually the same type of product. Think McDonald’s vs. Burger King.
- * Indirect Competition: Competing for the same market with a different type of product. Think McDonald’s vs. just about every other fast, inexpensive option to buy food.
So here’s the basic truth: you have competition.Lots of it. It doesn’t matter if it’s direct or indirect. It’s there and it’s a huge, important part of the journey.
When I first started LiveNinja, I used to feel discouraged when I came across a competitor building a similar (or even sometimes the very same) product. I used to think it was a disadvantage for us when we were raising money, acquiring customers and marketing our product. Turns out this is a terrible way to view things because even though that’s what our initial emotions tell us, none of that is even remotely true.
When Drew Houston of Dropbox applied to Y Combinator, he didn’t hold anything back when asked about his competitors. Read the answer straight from his YC application.
Drew didn’t shy away from admitting he wanted to enter a crowded space filled with powerful players (like Microsoft and Google!) that were and still are actively pursuing a piece of the market he was after. That’s the type of hands on, could-give-a-*@$&-less-what-others-are-doing mentality that played a huge role in the success of Dropbox.
If you’re building something for a particular market of people, then chances are you’re extremely passionate about it. The next time you see a competitor in your space be excited that other people are just as bullish on the concept as you are, it means you’re onto something great. It’s further proof that there’s a big opportunity here. Drew didn’t view his competitor’s desire to enter his space as a detriment. He viewed it is an indicator that the opportunity was enormous.
Do the same for your space.
Have a competitor that just raised a ton of money from really smart investors? That’s more validation for the market you and your product are after. Other investors (well, at least the ones you’d want to work with) will recognize this activity and it will help validate your pitch.
Worried about acquiring new users? An active competitor in your space can give you valuable data to what’s working and what’s not. It can give you insight into how others are thinking and approaching your market. It gives you a pool of people to talk to, to ask questions, and to get their views on why they are using (or not using) your product vs. your competitor. This is a huge advantage. Treat it as such.
The next time you talk or think about your competition keep a few of those things in mind. Think of the word “competition” as a good thing. Think of it as something that’s going to keep your company’s lights on, rather than shut them off. The best entrepreneurs are competitive by nature. They embrace competition because they know that those who love to compete are the ones that win.
Will Weinraub is co-founder and CEO of LiveNinja, a video chat marketplace that connects you with experts in a variety of subjects and topics, allowing experts to monetize their knowledge or skills.