This isn’t the first time he says this obviously and has put a lot of thought into this. The quote I really like from him on this topic is:
“A startup worrying about competitors is like a fat guy smoking a cigarette as he worries about contracting West Nile Virus.”
I like to remind my two friends helping me build our side project right now of this reality all the time. There are so many things that could kill us at this stage, a competitor is the least likely.
His insight might not be as useful if you're not running a high-risk enterprise. At the other extreme of the risk spectrum, if you're opening a new gas station, it may be useful to check where the current gas stations are.
If competition can put a serious dent in your business then either you're so big that you can't reasonably be called a startup anymore (eg Instagram vs Snapchat, Uber vs Lyft eg), or your market is too small to be considered a "high risk, high reward" company (and thus you're not a startup by PG's definition).
Apply with anything Apply with any type of project you need help with. It could be a company, physics research, journalism, or art. All you need to do is convince other applicants that your project is worth doing.
Play the Tournament Every week other participants will give you feedback and points. The more interesting your work, the higher your score will be. Each month, the top-ranked applicants become new Pioneers.
Become a Pioneer Pioneers receive a $1,000 investment with the possibility for a $100,000 follow-on, a round-trip ticket to San Francisco and access to a private online forum with other Pioneers. See the terms of the Pioneer offer.
not that bad of an idea imho.
a VC fund with 100mil can fund 10,000 groups of kids this way. Gives kids new opportunities socially (reduces teen delinquency), and the VC could hope to recoup if/when one of them becomes unicorn status.
That's actually really, really good. It's super hard to adequately express ideas of "just do this (positive, constructive) thing and don't worry so much about (all the wildly unlikely things people routinely worry about instead)." But that remark does a surprisingly good job of capturing some important elements of the concept.
What's wrong when a grown man says something like that? Are phthalates to blame?
It is really important for the fat guy to determine if he is near Nile River, or an area infected with the WN virus and work out the chances of contracting the virus.
Sure a startup is "flimsy" in many ways, but doing good and adequate market research, determining what you have to offer that is better than current competition (when it exists) and considering if it's worth it is definitely something to thing about.
Worrying isn't useful, researching and planning is. If you have competition, study it and include it in your considerations and plans.
The fat guy should certainly do that, but first of all he should quit smoking and eating KFC. Those are more existential threats.
I've been panicking the last couple of hours, but now it's back to the grind. I've got a lot more feature ideas in mind, and this is just that extra push to do the things I've been putting off.
If you can't position, then you become a commodity and you're competing purely on price.
Furthermore, one way to avoid ending up in a feature for feature fight to the death with a bigger player is to think instead in terms of “job to be done”: https://hbr.org/2016/09/know-your-customers-jobs-to-be-done
By planning what you work on by focusing on what the customer is trying to achieve you’ll do yourself a favour when it comes to marketing as you’ll be able to speak in terms they understand.
Lastly, as you’ll see in the positioning book above, it’s not wise to completely avoid competitor analysis despite how unpleasant and draining it can sometimes be. A potential customer needs to understand why they would choose you over the incumbent. You need to know that answer before they can.
You can make a moat around your product, but that is different. You still have a core value proposition that solves their real world problem and there will be other people solving it too.
Most companies build moats through contractual lock in, trust and size, or simply buying their competitors. I have yet to see a feature only moat.
Over a long enough timeframe, the better player always wins.
I’ve just spent a few days with a client who is in a bit of a fluster, as they feel their business (ten years, eight people, very healthy revenue & profit with huge blue-chip clients) is under threat from a new VC backed competitor.
I said to think of it differently - that the new competitor is so inefficient and unsure about what they are doing that they need a $100M safety blanket. Some will be dazzled by their meteoritic trail - and will get their fingers burned when they touch it.
Also, that with a small team and minimal funding you have secured robust relationships with the core clients they need to make their business a success, and have locked them out. With a small team and minimal funding, you are the guys being invited to speak at conferences - and they are having to sponsor them to get air-time.
Finally, almost verbatim, as I give this speech to both myself and others fairly frequently: “Keep your eyes in the boat, row your own race - and make them anticipate and fear your moves. The moment you worry about what is happening in their boat and how you should respond, you are rowing their race, and you have lost.”
Take the Overcast podcast app, for example. I was one of the first users of it. The way its evolved over the years is directly because the founder uses it routinely. He didn't start by including the less obvious features right off the bat, he started by building the obvious ones. Only after he was happy with it did he start to pull in other features from other apps.
Some products you just can't do this with. I get it. I truly do, but try your best to find some sub-problem and ship it. Even if it's only to yourself.
I happened to befriend a number of successful startup founders ten years ago, before they'd made it. All the people I've seen sell companies had grit, myself included, but only the ones that shipped fast sold them for more than $Xm, myself not included.
SHIP.
(If you need more advice, better tailored to your product feel free to email me, but the most important advice will always be to ship.)
You have to study the entire market (which means competitors), and then see how you fit in there, and what is special.
But on Twitter you can block people and you can delete things easily. pg doesn’t write essays any more either, because now he has a hostile audience like with the Information, or when he said if you have a thick accent learn to speak English more clearly or when he said inequality is less important than growth and he got ragged for that. Writing in public is at best barely worth it for him with his greater profile.
Side side jab hasn't done an essay (one of the reasons I thought he was stepping down from YC somewhat) in quite some time.
Also this tweet is a good reason why on those essays he would always have someone read what he says first there are always 'thanks to so and so' for reading the essay.
Obviously there is some implied advice when PG says something. Look at how everyone is giving their 2 cents on a simple tweet.
It would amount to stepping on the toes of the new mod to treat HN like his personal pool of friends. It would be harmful to YC because HN serves the company in various ways.
He has no such conflict of interest on Twitter.
> At both Viaweb and YC, every minute I spent thinking about competitors was, in retrospect, a minute wasted.
Follow-up tweet:
> It may be useful for some companies to think about competitors. That's why I didn't phrase it as a general rule. In particular it may be useful for more established companies to. If a startup has to, though, they're probably doomed.
Also a quote from Jeff Bezos:
> “If you want to get to the truth about what makes us different, it’s this: We are genuinely customer-centric, we are genuinely long-term oriented, and we genuinely like to invent. Most companies are not those things. They are focused on the competitor, rather than the customer. They want to work on things that will pay dividends in two or three years, and if they don’t work in two or three years, they will move on to something else. And they prefer to be close followers rather than inventors, because it’s safer. So if you want to capture the truth about Amazon, that is why we are different. Very few companies have all of those three elements.”
As a side note, I added […] in the title to show this isn't the complete text but it got scrubbed then removed.
Back around the mid- or early '90s there was a management theory trend of working to identify institutional best practices and of formally benchmarking https://en.wikipedia.org/wiki/Benchmarking institutions against peers (often competitors). I don't recall much detail about it at all, because I was only a teenager at the time and I only heard about it from the summaries you'd see in magazines like the Economist. But what I do seem to recall is that (like many another management-theory trend) it went through a phase of red-hot excitement to widespread skepticism and moderate disillusionment, and partly for the obvious reasons: benchmarking competitors usually can't on its own deliver much insight into how to outperform the current leader in any given area, and doesn't usually offer much of an insight into future opportunities or challenges. So (it seems) even for established companies there are limits to how competitor-focussed it's usually advisable to be.
(AFAICT—and again, I'm just someone who read about this stuff in magazines as a child—this kind of management-theory/theory-of-the-firm study and experimentation really was much more prominent in the public eye twenty-five or more years ago, and has faded from popular awareness since; maybe because the work itself is less common, and less influential on institutions, nowadays too. I think that's a pity, because it seems relevant to some supposedly-new things you see generating excitement nowadays, especially in the vicinity of the tech industry. For example the whole Valve structureless-or-notionally-structureless-organisation effort is probably pretty well prefigured in the work of a generation of management consultants who looked at and tried out all kinds of institutional structures or absences of structure beside the traditional corporate model, generally in pursuit of much the same ends—more innovation, more amenability to change, better decision-making—and with similar mixed-to-disappointing results.
That's all for now kids. Next week, the X-Files. ;) )
There are some cases where I think we've failed at it, speaking for myself and not the company of course, but the concept is still the driving force behind a lot of what goes on. "Start with the customer". Amazon Go is a pretty big recent example where the company is really proud internally of the customer obsession that went into it.
Bias note: I've been an Amazon dude a long time now.
It makes a lot of sense for any company to operate this way (most I've seen already do) and explains how they can be genuinely customer-obsessed while still seeming like at times they don't have the average consumer's best interest at heart.
> Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.
Listed first on both https://www.amazondelivers.jobs/about/culture/ and https://aws.amazon.com/careers/culture/
But Ads ? They only harm customers.
So yes, they're less customer centric.
As a solo dev, you can't be all things to everyone. You need to focus.
And if you focus on a subset of your customers, you may be able to do the two or three things your customers need better than the big guy who can do 107 things. And that's how you sell your product.
Who gives you the right to decide what a customer should want? If they are with you and they are happy with your solution and they stay with you, it's not in your right to think that they should be buying it from someone else.
This is why we don't have one car model for each car category, one kind of food for each meal. It may seem logical that everybody should just buy the product with the most bang for their bucks but people usually need the right product.
Sporks are more feature rich than spoons and forks but most people would prefer to use spoons for the soup and forks for the salad even when they are fully aware that sporks exist.
if everyone is leaving you when they learn about your competitor it may mean that you don't have a viable product and you should make changes.
The only thing is performance. But for it's porpose, it's perfect.
A lot of things have more features, but I've build it as a managable HN with hierarchical tags. Which is kinda unique.
I think handlr could use a tagline and an elevator pitch somewhere. From the looks I thought it might be a more general HN clone and even after a few clicks it doesn't really reveal to me what it actually does.
I tried to read a sample on the Kindle app, but the text was simply ... impenetrable. The main idea, whatever it was, was couched in layers and layers of jargon.
When I contrast their jargon-laced writing style (e.g value innovation) with the lucid writing style of Basic Economics by Thomas Sowell, I wonder how they managed to sell 4.5 million copies.
As head strong (and certainly naiive) young founders at the time, we continued with our vision anyway. Thankfully we have gone on to become by far the largest rental agency in the uk, and have driven real change (see tenant fees ban) in the industry.
I mention this as when it comes to investment decisions, competitors / incumbents of course do matter. But as per what I think pg means here, when running your own business any time spent thinking about the next startup to raise a bucket load of cash is of course wasted. That has certainly been the case in our industry where this seems to happen on a monthly basis.
Congratulations on sticking it through!
I mean I'd love to have the free time to be able sit analyze and strategize against what my competitors are doing, but I'm too busy working on the next place which I believe will add the most value. In the end you'll end up with a different priority/feature-set and USPs that focusing and trying to replicate what your competitors are doing.
IMO the most important thing is to have a solid Customer base, they'll submit an infinite stream of issues/feature requests which will highlight where to focus your efforts on. Although it's also important to have confidence in innovating yourself as my best USPs have come from novel features that no-one has thought to ask for, as you'll pretty much only receive requests for features others have already done.
But since mostly everything can be copied, doesn't it make sense to build a defensible strategy , building things your competitors will find hard to copy ?
And doesn't looking at competitors helps with that?
No one should take PG's quip to be anything more than advice for those who are running a dysfunctional ship due to excessive obsession with competitors.
There are likely two broad ways any business gets off the ground:
(1) Unintentionally (2) Intentionally
Google was likely unintentional (Brin and Page weren't attempting to create a business for their dissertation).
Amazon was quite clearly intentional.
Most startups are likely in (2).
VC-backed startups and startups hoping to obtain VC funding have a goal of gaining some amount of strong traction (thus increasing the likelihood of fast and significant growth).
If you're intentional, and you have a goal of obtaining the traction that's attractive in the VC universe, then competitive strategy is not something you can ignore. It's not something you myopically focus on, but it will help guide your positioning and development (among other things).
How does looking at what your competitors are doing help with building a defensible strategy?
Either you're copying what they've already done and are playing catchup with already exists or you're somehow looking at what they haven't done to implement something you think they'd be hard to implement, in which case you're focusing on what your competitors are not doing instead of where you think will provide the best value to your Customers.
Which I believe is at the heart of what PG is saying, you should have relentless Customer focus and do what you believe delivers the most value instead of focusing on competing against your competitors.
The gp mentioned RIM as a clear example of a company that did not focus on its competitor (Apple) and paid dearly for such a mistake, but that’s an incomplete reading of history.
First of all, Apple was only one of several competitors including Nokia, Samsung, SonyEricsson etc to RIM.
The iPhone introduced by Apple heralded a new class of mobile phones that are considered smartphones that were:
1. touch-based;
2. had larger screen real-estate;
3. fully Internet-capable (compared to pared-down Internet protocols like WAP, i-mode etc).
After the iPhone was launched, Google entered the ring with Android. The head of Android (who is ex-Apple) has publicly admitted to scrapping their v1.0 after he saw just how good the iPhone was. IOW, Android copied several concepts from Apple because the iPhone demonstrated what a smartphone should be capable of.
This imitation step is important as it marked an important shift in the smartphone market — the Overton window for smartphones capabilities had moved: will people continue to buy screen-constrained and Internet-constrained devices that feature a physical (high tactile feedback) keyboard OR screen- and Internet-unconstrained devices with a virtual (low tactile feedback) keyboard?
RIM bet the house on the former while the market was slowly but steadily moving to the latter. Of course betting against what customers were demanding is why BB lost against Android & iOS, not that RIM failed to imitate Apple to the letter.
Not only that but what is exactly the definition of 'worry'? It means different things to different people and maybe what he did was obsessive compared to what someone else did or would do in the same exact situation.
Look I am obsessive with computer backups as much as I can. Luckily I haven't really needed them. Wouldn't it be really stupid for me to say years from now 'boy I wish I hadn't spent so much time worrying about backing up my systems?'. (Of course not and that's obvious).
I guess his thinking has evolved over time -- https://twitter.com/paulg/status/1109220781035307009
Grant doesn't give a damn what the enemy does out of his sight, but it scares me like hell.
Blatant example. The scope on my bench has a floppy drive. You know for saving traces. Yeah like anyone wants or needs that today.
Often good solutions even agree. I had it more than once that I build something and than found someone who had build a super similar solution.
I think the fine line for me would be: Don't be obsessed about details and movements of your competitors, don't assume everything they do is good. But check them out for some inspiration.
Actually especially those things you can copy from companies that are not even competitors (other core domain), you really should copy. E.g. check out nice empty-states or registration flows to jump start your first implementation (and than iterate for yourself).
"That's why YC is now more focused on biotech and food businesses. Computers are no longer the fastest growing market and YC is smart to adapt so quickly while other VCs are still playing catch-up"
I misread it similarly, at first glance.
Gaining experience is inherently an inefficient process. It’s the nature of the beast. (And it’s tweetable).
If you want to grow fast and sell out, then you probably don't need to worry about competitors, but if you want to stay in business for a long time, you do need to worry about having sustainable competitive advantages.
Worrying about your competitors redesigning their shopping cart or reducing their price by 99 cents per month might well be wasted time, unless you happen to find their design particularly admirable or compete in a very price sensitive industry. But not even considering what people might use instead of your service (even if this "competitor" is actually "do it in Excel") and whether there are things you can learn from that would be a bigger mistake.
When pg is saying that thinking about competition is a waste of time, he's not saying you should ignore the competition, only that you shouldn't sit there stressing out about it rather than working on your own startup.
Also, if you take these pearls of wisdom fro village elders seriously, remember, there's a selection bias at play.
My studio recently released a product that seems to be being praised for the fact we did not construct it in a vacuum and learned from the misgivings of our own product and other products in the same genre.
They won a lot of prices, but that's because the global championships were "just a practice" for being the best internally. Not bothering others, not settling for a second place. Ever
My take is that entrepreneurs need to be obsessed with their Market(s) and Domain expertise; which includes also the other players (competition) but not just competition per se.
