Why competition is GOOD for your startup
I operate in a very competitive market.
To give you a quick idea, I run a newsletter that sources projects for sale, and sends my best finds to subscribers.
Now, there are plenty of startups aiming to serve the very same customers. There are only so many people interested in buying an established startup, or upcoming newsletter, and we are all competing for their attention.
Before you start a business, you're always told you must find a gap in the market. If you don't fix a problem no one else is solving, you'll fail.
But I'd disagree.
See, there are now more entrepreneurs than ever. You can almost guarantee there's another business out there, trying to help the very same customers solve the very same problem that you are. (If this isn't the case, chances are it's not a big enough target market anyway.)
This was the case when I started Bootstraw. See, I used to be very intimidated by competition, especially as a rookie. I felt like my idea was doomed to fail, merely because others had a similar one.
However, just because there were other players in the market, doesn't mean I needed to back down.
The Iron Law of the Market
In his brilliant book, 'The Personal MBA', Josh Kaufman introduces the concept of the 'Iron Law of the Market'. This will apply if you're starting a newsletter, SaaS, or any other project.
So, what is it?
In short, it means that even the most innovative and genius idea will fail if no one wants it - creating something no one wants is a waste of time.
So, if there are successful competitors in your market, it means that you've already passed this step. They've essentially validated your idea for you. It's very easy for us indie hackers to spend months building a slick SaaS, but we're trying to fill a gap in the market that doesn't actually exist. If there are other players in your market, like mine, that also means there's demand for your product, otherwise there wouldn't be so much competition. This is a good start!
To build a successful business, you don't need to reinvent the wheel. You don't have to create something revolutionary to gain your first customer. Put simply, you need to provide value that others aren't.
How to stand out
So, if there are competitors in your market, you've already done something right. You've passed the iron law of the market, but how can you make sure you stand out? These are competitors, after all, and you're vying for the same customer. You need to give them a reason to choose you over the others.
I'll walk you through how I did it.
If you want to buy a startup, where do you go? There are so many marketplaces yet, they can be littered with so many unvetted listings. I felt like I could save my subscribers time by going through them and sending out the very best deals.
But, this isn't enough. I realised I needed to bring some unique value. So, I chose to privately source deals, so I could offer something to my subscribers that other players couldn't have access to.
Now, for you, the way you stand out from the crowd will be very different. Maybe you want to charge a lower price, making your service a very easy buy. Maybe you'll want to improve your product and add a new feature no one else can replicate. Regardless, your best ideas will come from what your competitors do, and crucially, what they're not doing.
So, find the biggest players in your market, and go through their process as a consumer. Find 2-3 things about the experience that you can do better. These will become your USPs and what you spend your time marketing.
(I recommend starting with multiple because likely one will catch on and then you can go all in later.)
To wrap up, competition is seen as bad for your startup. However, we've just used it to validate a market and to find your USP within the space.
Now get to work, and find that first customer!
Great post! It's refreshing to see someone challenging the notion that competition is always a bad thing in the startup world. Your perspective on the Iron Law of the Market is spot on - having competitors in your space can actually be a validation of demand.
I love your practical approach to standing out in a competitive market. The idea of going through the consumer experience with your competitors and finding areas to improve is a powerful strategy. It's not just about being different for the sake of it; it's about identifying real pain points or unmet needs that you can address.
Your experience with Bootstraw and the decision to privately source deals to offer unique value is a great example. It's a reminder that differentiation doesn't always have to be a groundbreaking innovation; sometimes, it's about executing existing ideas better or providing a more tailored solution.
I appreciate your emphasis on not reinventing the wheel but instead focusing on delivering value that others aren't. It's a practical and actionable approach that resonates well with indie hackers who might be overwhelmed by the competitive landscape.
Looking forward to hearing more about your journey and how you continue to navigate and thrive in this competitive space. Keep up the excellent work! 🚀
thank you Angela!
sometimes competitions make us strong from inside
very true! it's what gets me out of bed and working.
True
I recently decided to go this route and build an SEO snapshot tool the folks just starting up.
I’d love to see some examples of companies who have followed this path of coming into an already crowded competitive market. Which companies inspired this article?
naturally, in starting Bootstraw, that gave me the intial inspiration, as acquisitions are very competitive.
Aside from that, I think the agency model is a good example. Think about how many social media management agencies exist, or influencer marketing agencies. Plently can exist in a crowded market if they have different niches/specialities with the offer.
The other side of the coin, the key issue. Has your comp built a moat? Are the barriers to entry practically insurmountable? In other words, "pick your fights" ... wisely.
Very true, some markets do have huge barriers to entry. But in general I think Indie makers shouldn't shy away from competition, as there's always a niche or way to differentiate your offer.
A promising area is "refactoring" some the oldest but widely accepted cloud-based SaaS apps. They are showing their age.
This is great :)
I always believed having a mediocre/inferior product in a great market is better than having a great product in a bad market because you can fix your product, but you can’t fix your market.
Fully agree, thanks for reading!
I do really agree with that if you have competitors than it means you choose the right market.
glad you liked it!
"Regardless, your best ideas will come from what your competitors do, and crucially, what they're not doing."
I knew this. This is gold.
Thank you! What project are you working on?
I'm actually working on two projects, soon to see the light of the day: 1. online marketplace 2. devtools space
very nice! what's the marketplace?
"your best ideas will come from what your competitors do, and crucially, what they're not doing."
well said. Thanks mate.
Thanks for reading! Glad you enjoyed
Wonderful post!
Thanks for Reading!
True. I have just built a chrome extension. Not new, there is a similar one already. I had a mission of building 12 products in 12 months. Tried a unique one in the first 15 days of Jan. Did not work out and quickly built this extension in the next 15 days.
The way I see it, I know i is a validated idea. So why not. Whoever will serve the customers the best will win.
totally agree. best of luck with your projects, let's connect on X
Great article. Your POV is really very informative here why I think "competition is
GOOD for your startup" Competition in the market can serve as validation for your startup's idea or product. If there are other companies addressing similar problems or needs, it indicates that there is a demand for the solutions you are offering.
thank you Katherine!
I really appreciate your observations on the Iron Law of Market. Finding distinctive value propositions is essential. How do you consistently adjust to changing conditions in the market?
I'm still starting out, trying to establish my product first! I do think there will always be demand for buying startups, but naturally, there will be better and worse times for the idea.
What are you working on?
By seeing competitors as proof of demand and focusing on creating unique value, you've outlined a smart strategy for differentiation in crowded markets. Your approach of offering exclusive deals to stand out is a prime example of turning competition into an opportunity. This mindset shift from viewing competition as a threat to a validation tool is a valuable insight for any startup looking to carve out its niche. Thanks for sharing!
thank you! what are you building?
Right now, I am on the lookout for early-stage startups to join our program. We help founders launch their digital products in just 30 days. We have proven traction with our recent collaboration with an e-commerce startup, as they are now gathering insights and investments with our delivery.
very interesting! how's it going?
We've connected with many startup founders and are excited to expand our network. If you're aware of any startups looking for opportunities like ours, let's talk more in private messages or on LinkedIn. Your recommendations and input would mean a lot to us!
drop me a message!
I was having a hard time with this. I am from Nigeria, and I have been working hard to build a customer engagement tool. During my research, someone told me about a tool that does the same exact thing, I researched them, and they are doing it right. It got my spirit down a little, and I have been struggling with coming up with a USP, which is making me consider looking for another idea.
I've been there. Have you gone through your competitor's process? Have you found anything you could do better?
Hey 👋. No, I haven't. Plus customer acquisition is gonna be hard. If I can't find a strong unique selling point, then there is no point.
drop me a message on twitter, would love to help where I can.
Great article. Your perspective on thriving in a competitive market was really enlightening! Seeing competition as validation instead of a threat is a refreshing perspective.
thank you!
Great post! I agree with you, Competition is usually a good sign.
thank you! what are you building?
I am building an AI video creation and editing tool. I actually have already built most of the backend. Now I am looking for a non-technical co-founder or funder. What do you think?
Fantastic article. There is no reason to be afraid of competition you’ll face in your niche, unless you’re facing monopolistic market that you realistically can’t beat.
If you’re really competing with no one, there are tiny chances you’re a market penetrator or insane innovator. Chances, however, that you are selling someone no one’s interested in are drastically higher.
I completely agree with you!
thank you! competing with noone is a bad sign for the indiehackers.
Interesting take on competitive markets, I totally agree!
Personally, I’m for some reason attracted towards more competitive markets anyway. Makes things more fun.
competition can be fun! it's what gets me out of bed to work.
Is it always necessary to have a unique selling point? Maybe not. Maybe, providing good value is enough, and just by existing in the market your business has a chance.
Look at Starbucks, Cafe Nero, Costa… they all sell good coffee. Lots of customers just want good coffee. Lot of customers don’t can’t about USP.
Very good post Sam! I was not aware about the Iron Law, very interesting!
I totally agree and sometimes a lot of us, including myself, forget about how competition can be useful for market validation.
Thanks for point it out and explain it very clearly!
This insightful piece highlights the reality of operating in a competitive market, resonating with the challenges faced by startups in Pakistan. The author's perspective on competition challenges the traditional notion of finding a gap in the market, emphasizing the importance of providing unique value even in a crowded space. By focusing on differentiation and understanding customer needs, startups in Pakistan startups in Pakistan can navigate competition effectively, leveraging existing players to validate their ideas and carve out their niche in the market.
Don't think it only applies to Pakistan!
I love this article, as it reminds me of the phrase "a rising tide lifts all ships".
It does, however, make me a little nervous that no one else is doing my business.
I should've included that phrase in the article, well put!
What's your project?
EnergyDrinkRatings.com is meant to be a crowd-sourced rating system, like how Vivino does it for wine, but for energy drinks. The market is exploding in popularity, but it is hard to find a good one. I was hoping to make it easier
very interesting idea, I wonder about the widespread demand for the site. How's it been so far?
A decent amount of international traffic. Mostly USA but some in India and Canada.
I think the issue I have been having is spreading the word.
The concept of the "Iron Law of the Market" is particularly insightful, emphasizing the importance of meeting customer needs and providing value in a competitive landscape. The author's example of finding success with Bootstraw by offering privately sourced deals demonstrates how focusing on what competitors are not providing can lead to differentiation and customer loyalty.