I just discovered an overwhelming competitor | Hacker News Reader

I just discovered an overwhelming competitor

18 pointsmoreq14 comments

Hello all, I am a web developer, have been working on a project of mine for several months now. I am working on it as a hobby, putting my free time at the end of every day and in weekends (I cannot find more time, as I cannot quit my day job). I’ve preformed a very comprehensive market research to make sure my idea is unique. A few weeks ago a competitor launched an application almost identical to mine, but much better. It was built by a small startup, with the investment of a venture capital. They currently have 4 workers working full time on the project. For comparison, my application doesn’t reach half the level of what they’ve built and only now am I about to launch my application to the open public. I currently have no users but friends who are giving me usability feedback. The market in which we are both working is huge, and currently we are the only two players in it.

What should I do?

Thank you

They also have to pay their 4 employees and their VCs need a return on investment. If you're 1/2 of their product w/ 1/20th the cost, you have options. Consider ways in which your "low cost/complexity" can be used to your advantage. E.g., drastically undercutting their prices (destroying a large part of their market) and moving on. This might compel them to aquisition.

Fundamentally, you do not need to make as much money as they do because you're a lean team.

There are many, many reasons why you should not be discouraged or dissuaded by competition. I'll touch on just five:

1. The "first mover advantage" is a myth. In most industries, those who we recognize as the "first movers", weren't. They were just the first to achieve sufficient mind/market share. Others have written extensively about this. Google it, if you don't believe me.

2. Contrary to popular belief, competition is good. It establishes to customers and other investors that someone else thinks there is value in the market you are seeking to develop.

3. The competition that you view as "overwhelming" may in fact be a paper tiger. They may falter, you may out execute. Their strengths are also potential weaknesses. They are beholden to investors and employees, which makes them potentially less nimble. You are beholden to no one, and can potentially be more able to respond to new opportunities or uncovered risks.

4. Your respective offerings may end up targeting different segments of the market, and not as direct competitors. You may even end up as partners, either via contract or outright acquisition/merger.

5. If they are successful in carving out a market and generating publicity, other investors/acquirers will be looking for others with similar offerings to invest in/acquire. Even "failed" companies can be profitable to their stakeholders, if they are run smartly.

That being said, it is also important to know that if you are going to fail, fail quickly and move on. You have only one finite resource, and that is time. Don't waste it.

But - I'm going to reemphasize this so as not to end on a "downer" - don't be so fast to concede defeat just because you are faced with a little bit of competition. After all, look at the Friendster-LinkedIn-MySpace-Facebook saga.

Historical: Feynman's autobiography, he mentions a company he and a chemist started, electroplating plastic tchotchkes. A German(?) company started up with flashy ads and promising more options for materials etc. Feynman gave up and went back to Professoring. Years later he met a German, who mentioned he also once had an electroplating company, "We gave up, an American outfit was doing more advanced stuff than us, most of what we advertised we weren't able to do yet". He meant Feynman's company, of course.

That your idea is unique doesn't really matter. Most likely anyway, it wasn't, and someone else has tried something in that area before. The implementation is what matters.

You say you are basically ready to release it. So do so. Just focus on making your product as good as possible.

If you have less features than the other company, that's fine. It seems you are launching with a smaller feature set than them, which is probably a good thing, as until you get users you won't know whether any of them are useful or not.

You should check out The 22 Immutable Laws of Marketing (http://www.amazon.com/22-Immutable-Laws-Marketing-Violate/dp...)

It's all about carving out your own unique niche in the marketplace and in the consumer's mind.

You'd be surprised just how much your app and outlook will change once you put a unique spin on your offering and focus every feature around it, instead of trying to play catchup with the other guys.

i think a lot of the advice the 37signals guys give would be good to hear. their basecamp wasn't the first or "best" of its kinda but the founding team makes great arguments as to why it was the best that could be offered. check out http://37signals.com/ and the samples from their book REWORK or maybe check out DHH's site http://www.loudthinking.com/. while i wouldn't agree with all of his thoughts (at all), he does speak to/about the importance of persistence and various manifestations of ingenuity that are possible to make a product/business succeed.

at the same time, let's be realistic here--if you think that they will be able to offer a better product across the board or that the product that you're developing is quite niche and that they will own the products community, you might even now start thinking of ways that the work you've put into this tool can be redirected without being significantly diluted/compromised.

just a couple thoughts. good luck.

If the market is huge then you both have enough space. Being no.2 is not that bad as it seems.

being n°2 can be a huge advantage ! if you keep track of what n°1 is doing you can avoid lots of mistakes, cut cost on marketing (no need to evangelize the market), implement features that users of n°1 are beging for but that n°1 couldnt implement first, ...

Every n°1 have a good n°2 (except maybe Ebay)

Competition is good. Don't follow them, follow your users.

Launch your product immediately. Link it here as part of an "Ask HN: Feedback on my first version." Take the feedback and keep building.

Continue to monitor the competitor, identify their mistakes, and do your best not to make those mistakes too!

As was said already, having another person in the space is a GREAT thing. First mover advantage never won anything, you've got plenty of time to build your app slowly and carve your niche :)

Keep close tabs on that market and be sure to focus on what your users find useful. You can still be better while being leaner.

A laundry list of features isn't everything... it can, in fact, be quite harmful.

At the VERY least, if the bottom falls out, you've learned a hell of a lot, I'd wager.

Are you going to throw the towel in? If not, ignore the competitors and listen to your users and work on it. Keep going. Other VCs might just invest your startup too, if it make $$$ sense to them. If you want, I can help to test your apps for you too.

Launch early, upgrade often and kick their ass. If they have a small team and have accepted VC money the clock is ticking for them. For you? Well yuou have time and options. Pick your new features well and give em' hell.

Join them.

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