Is it a good idea to talk to your competition?
I found the co-founder of my biggest competitor that I intend to disrupt. They worked there for 8 years and left 4 years ago. I'd love to chat to see what I have lying ahead. Is it a good idea or too risky?
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Talking is perfectly reasonable. Focusing on how the competition is run, their customers, and other things is where the traps lie.
I think relationships are the key to everything. I owe almost every success I’ve had to the relationships I’ve built just by being genuinely interested in what people have to say. So, if you are genuinely interested in what this person has to say not just about their previous company but about business and software in general, I say reach out.
But focusing on the competition is a well-documented pitfall many entrepreneurs fall into.
Could you clarify more about the "trap"? Is it bad to learn about the business and their challenges or is it fine?
They've been in the company for 8 years so I'd love to learn about what challenges lie ahead. I also want to learn about how they tackle regulatory and why they made certain marketing decisions. Is this good or a "trap"?
I think learning about their experience is totally fine. But it’s important to remember that competitors are not you. Their experiences will not be the exact same. Many founders get tunnel vision on the competition and that is the “trap”. If you can avoid that, you’re in a great position.
A lot happens in four years, especially in tech. This person probably doesn't have any inside knowledge about what's next that you can't read about/grab from an industry analyst. That said, no harm in reaching out. Your competitor will eventually know you exist so the worst case is that this person alerts your competitor which probably isn't a biggie.
It is actually a consumer product so likely no significant changes. It would be interesting to learn about their relationship with the FDA and how they tackled the regulatory problems.
I'm a very new business that just launched. They've been in business for 10 years and are doing fine, but not as big as I think they can be. That being said, they never raised capital - completely bootstrapped so that's a big factor.
I talked to my biggest competitors (the CEOs) personally, but I always tried to be careful. I gave them some carefully-selected information and I actually did receive helpful information in return. Later I sold the business and the new owner was not as careful, I've heard stories of how the competitor stole a lot of his customers. PS: I started talking to them only years after launch when both companies were of a similar size.
I'm a really new business and they've been at it for over 10 years. I think I have some ideas of how to turn their niche product into a unicorn, but perhaps I'm just naive and would love to validate my assumptions with a conversation. Too risky?
Yeah, I couldn't say, tbh I don't know if they would even be interested in talking to you at that stage. Generally I would try to "fly under the radar" if you have a better solution than them. EDIT: Once you have validation and you are growing, you have a better basis for talking to them. But even then, do you want them to notice you or not? That's the question.
That's why I wanted to talk to the ex-founder. Wouldn't put me on their immediate radar. I don't want them to directly copy me, but I have some IP that will make it hard for them. I could also feign it so that I am not as threatening as possible - just someone starting out and interested in learning what I'm getting myself into.
Yeah, why not. Sounds like you could give it a shot.