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How competition can help you succeed
Even if another company is already working on an idea you like
Competition 😱 It’s a word that evokes a myriad of emotions, especially for indie founders. Startups seem to pop up daily, each one aiming to grab a piece of the market share.
Oftentimes, indie founders steer clear of really interesting projects because they feel there is too much competition in that market. It’s a common cognitive bias because that’s how we’re taught to think about competition in the “normal” business world.
However, when you dig a little deeper, you realize that in the grand scheme of things, competition, especially for indie founders, is largely irrelevant.
And yes competition matters to huge companies... But as indie founders, we normally only want a small part of a large market. This is our indie founder superpower, a bit like an invisibility cloak. Because, we are no threat to the giant players and we only need to siphon off customers from a large market.
Here’s why…
🎯 It's all about differentiation
With true differentiation, you can carve your own segment out of any market. An analogy we like to use is Photoshop layers. In this analogy, the market is a single picture in Photoshop, built out of multiple layers. The trick is to make sure you are not on the same layer as anyone else. In many ways, this type of segmentation is like having no competition at all.
Example:
Duck Duck Go is a search engine that competes with Google head on. Amazingly they have been able to compete with the behemoth and gain significant market traction (99.6m searches per day). They did it by promising not to track users search or browsing history. In other words, they differentiated themselves from Google by offering users privacy - something Google is not capable of.
Other forms of differentiation:
Building authentic relationships, understanding customer pain points intimately, and rapidly iterating based on feedback makes indie founders more relevant to their customers than any big-corp.
For digital products, different people have different learning styles. For software products different people like different UIs, feature sets etc. Indie founders can take advantage of this.
Competition as an advantage
In many ways, competition can actually help you. Here’s how:
While it doesn't validate your specific product, it validates you're in the right ballpark and not wasting your time investigating the idea.
It's ridiculously helpful to understand what price-points a market can bear at the high-end and low-end. Not possible without competition.
Competition gives us a roadmap to acquire customers. At the start we can learn from their ideas (SEO, Content Strategy, Customer Profiling) AND as we grow bigger we can avoid what they are doing and find new untapped ways into the market.
Pre-existing products are often discussed in forums all over the internet (with praise and complaints). This is an excellent opportunity to a) find early customers and b) learn what customers want.
When you can see everyone else's unique selling point in a market it maps out a path NOT to follow and helps you focus on searching for your own unique market segment.
If a market is small (< 20,000 people), and is dominated by a few players who already have > 50% market share combined. It is a helpful signal that the market is too small and crowded to enter.
Wrapping up
While competition is a reality of the business world, it's crucial for indie founders to shift their perspective. Instead of getting bogged down by every new entrant into the space, focus on what truly matters: delivering unparalleled value, forging genuine relationships, and carving a market segment that’s uniquely yours.