So I have built something that already exists...now what?

It's very scary that you didn't already know about them. They haven't exactly been in stealth mode -- most people have been aware of them for at least the last three months.

Most people? On Earth? Really?

Most people that follow the startup world, yes. I was surprised too he hadn't heard of this high-profile competitor.

> So this is actually cross posted from r/startups at reddit. I trust you guys more than the hive mind on this one.

I am confused. Your reddit post[1] had some really good suggestions and advice. What makes you think HN is less hive mind-ish than most other places? And what does hive-mind has to do with the topic?

I just think that point was in bad form. There are good and bad points of reddit community (just like any other online community), this example is not one of them.

[1] http://www.reddit.com/r/startups/comments/c9q1x/so_i_have_bu...

It's a really good problem you have here. If you're self admittedly not good at the business/management end, I'd encourage you to think about what your real goal is. That is--I often find myself building products because--well--I love to build products. It's my hobby.

On the other hand, I've been involved with enough startups to know that most of my attempts to commercialize my products will probably fail. So back to goals--you say yours is to escape your cube. Do you mean:

1. I want to escape the type of job that puts me in a cube.

2. I want to no longer work as a developer.

3. I want to no longer work--since I'm filthy rich.

Those span the gamut of goals and without knowing what you are really after, it's hard to give you advice on how to proceed. For the sake of adding some direct reply, let's assume it's #1 above. In that case, I'd say--keep honing your skills, demo your product and use it as a calling card for a job search with companies you think you'd be a fit with (maybe even Square). Don't bother the commercialization path and don't sweat the competition--since this is lateral to your goal of a better workplace--and a lot more achievable than a commercially successful startup.

Hope that helps.

Hey, I work at Square and I'd say if you're passionate about it you should go for it. Startup life is a whole lot more fun than corporate life. If you've found something you're so excited about that you want to spend your free time building it that's totally awesome.

The one piece of advice I've got is to watch out for the business/regulation side. Dealing with the payment card networks is a seriously non-trivial problem.

Yeah it's always a little depressing to discover someone else has had the same idea as you - and executed on it. Although it is a little surprising you haven't heard of these guys - or at least the product - it's been in the press a fair bit. Hopefully the lack of marker research / market awareness is not indicative of any other issues :)

Generally speaking, there's always room for more than one vendor, for any product or service. Even in the giant-dominated worlds of search and social networking there are plenty of smaller players who do well. If there is a market for something, there'll be room for several suppliers - perhaps many.

So, I wouldn't get disheartened. As others have said it's free market validation for you (assuming they have customers). So look at their customers - who they are, what's the use case for them, what value do they derive from it? How much do they pay? Answers to these and other questions will help you market your version more effectively.

The only issue is: can you deliver? Do you have the technical know-now to build this product (e.g what about the card-reader? security, customer data protection etc etc?). And do you have the resources / sales route to take it to market and get customers?

If you think you can build this and get it market, then great. Go for it. The competition will only force you to better your product, give you ideas and show you where the money is.

Drop it.

Or rather evaluate how long it would take you to catch up with them (in their existing state) including the hardware part - acquiring it, stocking, selling, supporting, etc - and then see if you are willing to do that knowing that you will also need to out-market them. Then sit down and think about it. Realistically you are too late and you are too few. Think about it a bit more and then drop it.

@ youdontknowme123,

What is important is having had the wherewithall to get to where you are. Now what do you do with that knowledge? Finding VC money isn't necessarily the way to go. In fact, it's rarely the way to go unless Stress is something you just can't do without.

The fact that someone else (SquareUp) has beaten you to market is irrelevant. Square isn't out of the woods yet.... Visa, for example will have something to say about it. Their reader is also not unique, and iPhones will all have the capacity to read cards, without external gadgets.

IMHO, you should go after an "alliance" with someone in the financial transaction business. It's not an easy game to play in, as one your posters has pointed out. I'm not in that business but can help you find someone on that front. And no, I don't want anything for the help, but I've been an entrepreneur and sometimes when you're in the trenches, you can't see the forest, not because of the trees, but because the muck and mud are up to your eyebrows. :-) jdebar AT telus.net

And good luck giving air to your entrepreneurial spirit.

Send me an email simon@rhinocloud.com I run an online accounting application and looking at building this area out as well.

Square has secured at least $10M in funding (http://www.crunchbase.com/company/square) and are pretty far along from what I can tell. That said, there's almost always room for competition, especially in the payment gateway market. If you think you can make something that is better/cheaper/simpler/etc., I'd say go for it (since you've already been working on this for the past few months). Find a partner to help you out and if you need money, try pitching to local angel investors. If you can seriously compete with Square (and convince them of that), it shouldn't be hard to get some kind of seed funding.

I'm doing something similar (not similar to this niche, but going after a niche that has many competitors). But, we did it intentionally, so there was no surprise.

What we're doing is focusing on one killer feature -- and addressing it in a way that none of our competitors do.

So, what's your killer feature? I would think hard about that, because that's what will differentiate yourself.

Once you have a beta product, I'd pick a geographic area and market there. Research the Yelp approach. They were very, very far from the first to market -- and had a unique approach to get a competitive edge.

You have to ask yourself what is your real goal? Making such prototype is 5-10% of the overall task. Market that kind of product and commercialization is the rest of it. If you truly want the product to come to market I would try to find potential customers and than try to close a first round of angel investors. Following than would be to build up a small team, continue product development and so on. You can see it is all in the execution towards the goal and that closes the comment with the same starting question. What is your real goal?

Unless you already have the partnerships with the credit card processors and the capital to protect yourself from fraud (90% of the work) - I would release the design as open source and make it compatible with Square.

This will at least let hundreds of people build their own readers, and potentially educate most of them in magnetic stripe encoding.

Alternatively/Additionally the Square reader is miles away from ergonomic and by having another design out there you can make a small profit by selling more reliable readers.

".....has complete feature parity with another company's product! In fact, not only does it have complete feature parity but the other company's product has all the features that I wanted to implement."

Eh? So when you say "parity" you actually mean they've got heaps of features that you don't?

My advice would be to look at the niche that they're trying to serve and attack it from another angle. They're a "everyone can use it to get paid" company, maybe you should focus even more specfically on shopkeepers or tradesmen?

I would be really worried if there was no other company in the world that was working on solving the problem that you also working on. Competition is good, it validates the market etc.

The real question is not "some one else is working on this, should I quit?" To me, the real question is "someone else is working on it, the problem is real and there is market demand - am I ready to do whatever it takes, for however long it takes, to make this company successful?"

You'd have to catch up before you can pass them. They have features, capital and business and sales skills that you lack. Time to pivot (read up a bit on Steve Blank). Find a different market to apply the work completed to date. Another critical question is: "How good is your understanding of the customers' needs?" Talking to your potential customers is the best way to figure out where to pivot to.

Read Rework of Jason Fried and Heinemeir Hansson. This Will mots probably change your perspective on this situation. Getting real of 37signals too. One of the unexpected advise is to underdo your competitors. Another one is to art a business not a stratus. Etc.

Maybe see if you can join them...

Square seems to be working in a niche; but on their own so there is always space!

Also; the Square site is quite confusing and unclear. You could definitely outmanoeuvre them with some effort.

one approach is to try and target a niche of the market, where you can get closer to the customer (ideally a high-frequency niche) and get more social, and use a social campaign to get key influencers on board. it may take a bit of brainstorming on that one though.

there's a good book on marketing strategy by some ex-microsoft guys that explains 3-5 standard market entry strategies. i suggest finding that. can't recall the name. has a picture of a football play on the cover i think. enjoy and good luck.

found it, the marketing playbook

is the name of the book

You can out market them, charge less, or do any number of things to differentiate them. Don't worry about it. Anything worth doing has competitors. Might actually help get you funding.

How do you or squareup solve the problem of the bad guy that clones the iphone app to steal PINs and uses a card skimmer as a 'reader'?

This looks like a phisher's dream to me.

I think that's a problem for the cardholder, the card company, and most of all for the merchant who later takes a payment using the stolen card (and usually gets stuck with bill). Square doesn't bear the cost, and after all, what can any payment processor do to prevent scammers from mimicking their hardware and software?

Shop this around with VCs as a "square competitor". If the market is great, then there's room for more than 1 startup.

Out market them. Marketing can defeat any other advantage your competitors may have.

Do you have a demo? Contact me at mirko at buholzer cm

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