I have an idea in my mind, but how do i know if someother company is already working on a similar idea (espeically in stealth mode) or worse if i start working on my idea and half way through if the news comesup that some other company has already started a similar website?
what are some alternatives to avoid this situation?
Your idea is being worked on by a stealth company.
And Microsoft and Google are working on it.
And there's 17 open source projects and one of them is getting traction.
And three companies just got funding to do it.
You always have to assume all this is true, because it probably is. And if your idea is really good, it will certainly be true soon.
By the way all software companies are in this position, and it doesn't stop anyone.
The only strategy is to be the best in your chosen niche, and work really hard. Nothing else is in your control anyway.
I'd be more worried if you have no competitors or others working on a similar (or identical) product. Even if you think you don't, you do.
When we were speaking to people about our idea, the first thing people would ask is "who are your competitors". If you don't have any then there's generally two conclusions people will draw:
One of my best days was when our main competitor launched, it went towards supporting my arguments that this was a valid niche and showed that others were suffering the same problems and trying to find solutions.
You say it would be worse if someone launches before you with a similar product. I'd argue that first mover advantage can be over-rated and launching second means you have an opportunity to leapfrog the competition by offering something better than they do.
If customers have something to compare you to, it can be beneficial (assuming you provide something better) to be able to compare you to an 'inferior' competitor as validation that they've made the right decision picking your product over them.
All good advice above - I recently found myself in this exact situation, discovering that a competitor was about to launch a service similar to the one I had in mind, for free too. This turns out to be a good thing - as everyone says, it validates your marketplace and you just have to be the best in your niche. That didn't stop me feeling somewhat depressed when I found out though, although seeing what they had to offer did make me feel better :-).
A few things I have concluded:
I hope this helps a little.
I hear that similar startups is relatively common.
If you don't have competition then that should be a warning sign that your idea might not be valuable.
Your main competitors will not be other small startups, but established and dominant players, as well as entrenched habits for your customers.
You should focus on your market positioning, as this will ultimately determine if your company succeeds. You should look at the positioning of your competitors for ideas, but do not necessarily assume they are correctly positioned.
Focus on understanding your customers and developing the correct product/market fit. Understanding your customers is the best way to ensure the long-term value of your venture.
Assume they are. That should make you work even harder.
Even if someone releases a similar product solving the same problem, there is almost always room for multiple products. And don't worry about startups copying you - they have their own road map, and if they copy you they're dead in the water anyway.
The solution: work harder. faster. better.
As others said, being the best in your niche is the best insurance policy.
The danger of a better funded company coming out of stealth or copying your idea is very real (Kiko got completely swamped by Google Calendar, and there was a big shakeout in the personal finance webapp space as Mint won).
Perhaps ironically, competition may actually be a good thing. If your strategy is to get acquired, even if your are beaten at being #1 by your better-funded competitor, maybe you will get acquired by the acquirer's competitor if you are a strong #2. E.g., VMWare's success did not prevent decent exits for Connectix and later VirtualBox and even later for Xen.
Pl. follow the excellent advice before my input, the advice is valuable and read up all the QA on this site on Startups including various pointers to founder blogs, including Dharmesh's and Jason's.
The idea, as long as it is in your head, is useless until its productized. If you are afraid of competition then read up on how Intuit beat Microsoft among other examples. Once the product is released your pre-conceived notions of competition will also get revised, if you are paying attention to the competitive landscape. Other than direct competition, you'll get indirect competition from other apps that you may not think is competition but will be because they can absorb your idea. Then you may have to get nimble and be ready to specialize and focus your product to differentiate. One of the biggest problems is when the founders put on blinders and don't listen to customer feedback and non-feedback. These are some items, the list of what you should and can do as an entrepreneur is endless.