Strategies for When One Discovers Competitor


For that past few months, I've been building a product that targets a specific niche. The kind of product I have been building hasn't been around the marketplace, and I knew there is a demand.

Recently, a new product was released by a competitor. Their product has more features and has more support.

Usually I wouldn't care because the demand for this type of product is so vast that there should be room for the both of us. The problem is that they operate (coincidentally) in the same city as me. They are also starting to go after specific customers that I was planning on going after too. And there product isn't bad at all, a very decent looking product with similar features to mine.

Here is my problem. In these situations I would normally just get more motivated to work and add more features to compete. The problem is that this company has 20-25 employees working on this. I simply can't compete with that (I'm just one person with a beta product - my roadmap has things that this company has already built, so now I find it hard convincing myself to continuing building when I know this company has done it already). I could look for funding to hire more developers, but what's the point when I know there is a direct competitor right next door?

So considering this situation now, my thoughts are that I should just quit and move on to something else. Is it worth pursing and developing when I know there is just a well funded company building a competing product and going after the same customer base? Maybe this is a silly question but was wondering if there is something that's elusively obvious that I can do? Has anyone ever been in this position before?

Strategy Competition Exit Strategy

asked Mar 7 '13 at 06:34
K2x L
111 points
Top digital marketing agency for SEO, content marketing, and PR: Demand Roll

5 Answers


I feel your pain, I once was half way through developing a product with my company for a specific niche when along came Microsoft of all people it was an utterly demoralising moment.

Somethings to think about:

Competition is generally good, it helps innovation and validates the market you can also often piggyback on your competitors marketing. The key is to find something that makes you different, and I'm not talking about a different feature but a different way you present yourself.

Bigger teams often means bigger constraints, slower development time and disjointed behaviour as a small company you are able to quickly innovate and also small enough to change direction. One of the ways you can do that is look at your existing beta and decide if their is a similar target market for your product your competitor is not targeting and shift your marketing focus towards those users while keeping the feature set the same.

Our current main product when we started had one competitor who to be frank were terrible, not long after we launched, a couple of other products launched in the same niche. What ensued was a feature arms race, each product rushing out new version with more "killer" features. We won! Except we didn't as we have a massive product with far to many features that is complicated to use which means we now need to expend a massive amount in customer support, on the plus side we often get new customers because we are recommended for our customer support, support which is only really needed at the level we provide because the product too complicated!

The moral here is we went direct head to head with our competitor and ultimately for a little while I believe our customers lost out. When we came to this conclusion we switched strategies targeted a smaller sub niche our competitors were not. As people came across and researched our competitors they were still coming across us, and in the mean time we had our own pool of leads to pull from.

So to summarise, competition is scary but actually is good, use them to your advantage, but be different.

answered Mar 7 '13 at 18:17
Tim Nash
1,107 points


For that past few months, I've been building a product that targets a
specific niche.

How much customer development have you done to validate the value proposition of your offering? Are there particular sub-segments that you identified that may be more lucrative?

Recently, a new product was released by a competitor. Their product
has more features and has more support.

Competitors will always pop up - some well funded with more resources than you. That doesn't necessarily mean that they view the customer segment / requirements the same as you. Likely there is still a niche here - you just need to nail down the customer need + their propensity to pay for it to make it a business.

In these situations I would normally just get more motivated to work and add more features to compete.

That is an approach, but likely not a successful one. As you state, starting a cold war on features with a better resourced competitor is a losing proposition. And if the target market isn't defined by proximity to the business, then location isn't that much of an issue either.

Bottom line: rethink / re-evaluate your value proposition, tweak and validate with real customers. If possible, use your competitors offering as a example of how you address similar markets with different solutions.

answered Mar 12 '13 at 05:55
Jim Galley
9,952 points


They are obviously ahead of you, but that doesn't mean you should quit. Closely analyze their good moves and mistakes, learn from them and start selling your product somewhere else.

Another relevant point in your situation (from my personal experience): Even though your product might be an inferior in terms of features, there are still plenty of other factors (mainly sales and marketing related) that determine your general success.

answered Mar 8 '13 at 01:36
Matej Zlodej
273 points


Maybe instead of trying to compete (which does not seem possible), you could search ways to team them up! See it as an awesome opportunity, since they even started working in your own city. You could simply write them a letter stating the fact that you also have a similar product being developed, and you are willing cooperate. They are more than likely to want to meet you, to see what you know, and if you sell yourself well you could end up in a great position in that developer team, which may earn you more than your future market share.

if you get offered a less great position than your expectation, you would be still fine, since you will be working on something you "already know well" and you will not have to worry about the marketing, and risk, so than you will have a stable income, and the amount of free time and energy to focus on completely different startup.

Keep in mind, that:

-you are the guy, who completed alone half of the things, the 25 of them have done

-working together will benefit both of you if you negotiate well.

good luck!
(i would love to know if this might help in your situation, or i am completely out of direction since i am by no means expert at entrepreneurship, i just had that idea.)

answered Mar 11 '13 at 23:48
Jani Kovacs
75 points


The point is: Do you believe your product is better?

If you believe it -- most especially from an unbiased point of view, then go forward!

Go faster! If you have a day job, that'll hinder your progress -- unless you decide to use your sleep time to work, or like you said -- hire more to work for you.

As for strategies, you could try their product and find the flaws! Or perhaps even check out what you think would be better. That's the advantage sometimes. I'm in the same position as you; I see a lot of similar products out there -- but I am working under the notion that my idea does things that their products don't -- so even if I'm nowhere near ready with a prototype, I'm still going after it. At least until someone creates the same exact thing I'm working on...

answered Mar 12 '13 at 05:07
Yasker Yasker
47 points

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