Why is everyone afraid of competition???

So I agree, founders shouldn't be afraid of competition.

But I think it's important for a founder to be able to explain why they shouldn't be afraid of the competition.

Why will a customer choose you and not competing solution X ?

Often the founder's answer doesn't hold up to scrutiny.

They think they'll be able to compete on price, for example, because they underestimate how much it costs to acquire a customer.

In the tech world the economics are different than in the real world. In the real world you often get economies of scale by having a large business, but in the tech world a lot of software goes further. You not only get economies of scale, but through network effects and data analysis, a tech product can become significantly better than the competition and suck up the entire market. It's often a winner-take-all approach.

I compete by looking at the negative or low review comments. I then build what the negative reviews comments want. 💪🏼The same reason why I'm building my side gig.

Why this is? If someone wants to open a gas station or a coffee shop, we seem to be fine with that.
Because they are humans. They can convince themselves that the competition is very good and it means that a market exists but everyone suspect he or she should work much, much more and harder than without any competition.
The dream is "a market without a competition".
And because even with a gas station, or a coffee shop, you will never open it next to the existing shops. The Internet is global, therefore, there are no "local" places. So, any competitor already existing on the market is your next door. That's why is this.
P.S. I'm not discussing if the competition is good or bad, I'm just giving my own explanation.

Competition is a good thing. It might allow to confirm there is a market for that and also allow to be even better or ask better questions to your business (do I have the correct market fit? Who are my users? etc.).

Maybe this kind of thinking started in a time where there were a plethora of online opportunities with zero competition. Nowadays you have to find a very narrow niche to avoid competition. So I second your reasoning, today it's often better to launch in an already crowded industry than to find that unoccupied, but really tiny niche.

Good point... However, physical shops like a coffee shop don't really need SEO or social media to survive...

In my experience, people are both too afraid and too arrogant with competition. Yes, some of them won't start if their idea isn't unique (which is crazy) but other will thread competition like is irrelevant (which is maybe crazier).

In a month on IH, I've see proposed a viable businesses a trello clone 10% cheaper, a twilio clone with about the same discount, a youtube that pays creator more per view (never mind that you won't compare in the number of view and thst youtube lost money for over ten years with that pricetag) a quora that pays people who answer and so on.

By the way, your example is inaccurate. Every single gas station and cofee shop has an intrinsic element of differentiation, which is proximity to the customer. Second aspect, services are a lot harder to scale and if you look at huge incumbents in the market, their product is low quality (mcdonald's, starbucks). In tech is usually the opposite, more money to hire the best engineers and do marketing, more data to build a better product and no problems scaling, mostly advantages from integrations and network effects.

Another aspect, in every retail business you are building relationships with people. People that are part of your community, people that can become friends and so on. Online you can have the best customer support in the world, but still doesn't compare with the quality of the interaction.

I guess as long as you can differentiate in a way that customers care about, sure go ahead.