Ugh. I think these types of platitudes really trivialize the immensely difficult job of being a founder.
Which includes creating EULA and ToS. How much time does one “waste” by adding a couple of extra paragraphs that can probably lifted from some standard copypasta boilerplate?
If you intend to use this adversarially, or if there's a chance it'll get tested in court - don't cheap out. Hire a lawyer to do this.
And if not, why have it at all?
What's most important, in this context, is to have a founding team approaching the dynamics from different viewpoints, who can rein each other in if the instinct to monitor one's competition ever exceeds the strategic value, and share the burden of understanding the landscape of what customers need and what they think they can get elsewhere. IMO, having a great team is just about the only "startup rule" that is true without exception.
Improving the product presumably involves understanding the end user.
Understanding the end user presumably involves understanding their alternatives.
It's one tool for sure, but not one I think you absolutely have to use - unless you have some indication people are increasingly picking the competitor over you, or especially and more simply leaving you in favour of the competitor.
If this happens, you've already lost. Software development has long lead-times. By the time there is significant customer attrition, bending the curve will be immensely difficult.
Good engineering strategy requires over-reacting to the right signals, and trends in the broader ecosystem are a wonderful source of signals. Large tech companies know this, and there's a reason why they'll quickly throw billion-dollar budgets behind exploratory efforts in response to competitors.
That said, it certainly depends on the industry. Some sectors are more fast-paced and competitive than others.
Interesting.