Is there any reason to scrap a start-up, when you find out there is more competition then originally thought?


When initially researching the competition during the early stages of the product development, there did not appear to be very much competition, other then two larger contenders. However, as this project has closed in on completion and an alpha release, it seems there are many more lesser know start-ups and software firms releasing a product much more similar to ours.

I do feel that there is still a niche market to be targeted that may bring in some revenue, however, at this point, could it be considered that there will be too much time put in, to actually yield reasonable results?

I understand this is a rather generic question, so please request more information that may turn this question into something more finite and answerable.


asked Oct 6 '11 at 01:47
Rob R
58 points

2 Answers


This answer might be somewhat counter-intuitive, but I'd say that an increase in competition should encourage you to pursue your start-up even more. Here's why:

  • Your market has been validated. A lot of startups exist in a vacuum, trying to solve a problem that no one really cares about. Whenever your product is the first one in a market, there's always a huge risk that the market for that product isn't mature or doesn't exist. However, the presence of other companies in this market indicates that there is potential to connect with buyers. Consumers seem to care about what you do, and that's always a good sign.
  • It's now easier to define your product. If there are only a small number of other business in your industry, then consumers might not understand what you do or why it's important. But if you're in an industry where there are many other competitors, it's more likely that consumers will have already heard about your type of product and understand what you do in a broad sense. This will make it easier for you to focus on what your product does specifically. Your competitors also give you points of differentiation and comparison. For example "we do X, and we do it faster than company Y". Use your competitors as references.
  • You can learn from their mistakes without having to make them yourself. You don't have to take as many risks by developing and testing every new feature you can think of. Keep a close eye on what your competitors are working on and use their mistakes to your advantage.
  • You'll stay vigilant and focused Without any real competition, it's easy to get lazy. If you're the only company in your market, your customers can't leave to go anywhere else, so you don't pay as much attention to their needs. But if you have many other competitors just waiting to scoop up your customers if they leave, that'll light a fire under you to always strive for the best possible product. It'll give your team motivation and force you to focus more intently on your customers, making you a better company.

A lot of people would ideally like to run companies that have no competitors so that they could be care free and lazy, but I'd argue that the presence of a few similar-sized competitors creates a more exciting and rewarding environment for a startup.

answered Oct 6 '11 at 02:25
Hartley Brody
1,317 points


Being so close to having a product that you can send out into the field it would seem a shame to kill it now. Unless you have another idea which is losing you money because you are not pursuing it.

If anything, the new competition you've spotted should help you tweak and iterate your product even more. Identify what their killer features are and make sure you do it better. I'd be encouraged that actually you've started up in a space that others have deemed worth setting up in as well.

Competition is healthy - if you gave up every time you saw some fiesty competition you'll never have a business...

answered Oct 6 '11 at 02:08
2,333 points

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