Manage episode 361251952 series 3383733
In this episode we answer questions about how to handle competition! We all have competition and how we handle it is the difference between winning and losing in our markets. We are here to help and in this episode we answer questions including:
- How much time should we be spending thinking about our competition?
- How do you handle entirely new kinds of competition, like LLMs & GPT?
- What do we do if our competition starts to beat us?
All of these questions were submitted by listeners just like you. You can submit questions for us to answer on our website https://www.thestartuphelpdesk.com/ or on Twitter @thestartuphd - we'd love to hear from you!
Reminder: this is not legal advice or investment advice.
Q1: How much time should we be spending thinking about our competition?
The dream is to only focus on your customers’ needs. In reality, almost every founder – good and bad – probably spends too much time thinking about competition.
You should spend more time understanding your competition when potential customers name your competition as other solutions they are considering. You need to know who your potential customers are considering to solve the same problem you solve. You need to know why potential customers are considering them and, if a competitor wins the business, what made the customer’s decision.
In these scenarios, you can accelerate your ability to learn about your customers by understanding your competition.
In some cases, your “competition” may be a new trend or technical advancement, such as what we are seeing in AI. Tectonic shifts like this may make it possible to solve problems in a new way: this can either be a huge differentiator for you, a distraction, or a disruptor for your business.
Q2: How do you handle entirely new kinds of competition, like LLMs & GPT?
It will happen! If not today, eventually. Your playbook to handle this kind of competition should include:
- Assess your exposure. Will your product compete? Will your business model survive?
- Build a timeline for the impact. How long do you have?
- Talk to customers. How does this new competition impact them? Does it help solve their problem in a better way?
- Focus on your core niche. Identify where you can be differentiated and focus there.
- Consider finding markets underserved by the new trend.
- If this tectonic shift helps your customers and helps your key differentiation, consider integrating or, if your product is mature enough, become a platform.
Adapt as quickly as possible.
Q3: What do we do if our competition starts to beat us?
1: Make sure you know where and how they are beating you.
2: Talk to even more customers than usual. Understand WHY they are beating you. Is it your product? Price? Marketing?
3: Set expectations. There are rarely short term solutions, so set expectations appropriately.
4: Focus, focus, focus on whatever you need to do to win again.
Remember: your startup is a calculated bet. You should be in a constant state of learning if your value proposition works and adjusting where needed. If your competition starts to beat you, it is time to evaluate your differentiation. Simplify what you do so that you focus exclusively on your differentiation, and test continuously to see if your differentiation is enough to get you back into the winner’s circle.