Your Biggest Competitor Just Raised $60 Mil. What Do You Do?

[Canuker]

Scenario:

You decide you want to start a real, sustainable business.

You spend a year saving up money from a job that you hate.

During that same year, you relentlessly plug away at educating yourself by reading countless books and learning from the best.

You bounce around from idea to idea until you finally find one that hits all your checkmarks.

You do some market research and find that there are some medium sized competitors in your niche. BUT you aren't worried because you have a killer USP that sets you aside from them.

You validate it with some current consumers in the niche. They like the idea. They like it a lot.

You're finally in the stage of testing prototypes (not having invested too much money at this point) and getting samples.

Things are going smoothly.

You're walking down the street one day, rolling with optimism and motivation, plotting your future empire in your head when you see it....

At a newsstand, on the front page of a magazine amidst a sea of other magazines, you see your biggest (soon to be) competitor...

They just raised 60 Million dollars in strategic funding.

You flip through the article hastily - the newsstand owner giving you shit because you haven't paid yet, but you persist pretending not to hear him - reading that they have added some serious executives to their board and are poised for aggressive expansion.

Suddenly, all that motivation you had 10 minutes ago has evaporated into thin air and has been replaced with feelings of uncertainty and confusion.

There's a lump in your stomach.

How can you, someone who is bootstrapped and has yet to make a single sale, compete with that?

One of the biggest reasons you chose this niche was because it seemed young and lacking stiff competition.

Do you persist and continue to invest into product development? Hoping that your well thought out marketing plan and fresh USP will be enough to get you some momentum? You can probably attract some investors after that. Yes, I think it's very likely that you can.

Or do you dust yourself off and realize that you haven't sunk THAT much money into your current project and look for another opportunity? After all, your new wealth of business knowledge has you poised to be successful in many areas. Maybe it's best to look for a niche that you can better assert yourself?

****************************************************

^ My situation as of today.

Thoughts?

As for the weird wording of this post....I've been trying to hone some copywriting skills lately....

...more practice is necessary.

 

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[Dwight Schrute]

Well, if they raised 60mio then there's money to be made.
Even if your competition becomes a billion dollar company, there should still be at least millions in the game for you.

They can't serve everyone.

Think Coke vs Pepsi, McD vs BurgerKing, Google-Yahoo-Bing-DuckDuckGo, Redbull vs Monster, ......

It's up to you.

 

[Yoda]

Thoughts?

Go where the puck is going.

I'd not only be in, but I'd be watching them like a hawk.

Maybe they are the first big player in the niche... to that end, let them do the hard work for you... let them find success and failure... then optimize accordingly.

The first person to the party is sometimes the first drunk out the door.

 

[Canuker]

This

The first person to the party is sometimes the first drunk out the door.

They've been going strong for over 5 years and only now started to get big VC recognition. It seems to me like they are here to stay.

But, as you said, that's not a bad thing. I have definitely been studying their brand and the intricacies behind it. They are definitely the biggest player thus far and they've got there for a reason. I will be taking notes and then some.

 

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[sWALK90]

Figure out how they did it...and how can i..

 

[Ninjakid]

You spend a year saving up money from a job that you hate.

They just raised 60 Million dollars in strategic funding.

How can you, someone who is bootstrapped and has yet to make a single sale, compete with that?

Sorry, buddy. But it sounds like you and them aren't playing the same game

 

[TheTruth]

Scenario:

Do you persist and continue to invest into product development? Hoping that your well thought out marketing plan and fresh USP will be enough to get you some momentum? You can probably attract some investors after that. Yes, I think it's very likely that you can.

Or do you dust yourself off and realize that you haven't sunk THAT much money into your current project and look for another opportunity? After all, your new wealth of business knowledge has you poised to be successful in many areas. Maybe it's best to look for a niche that you can better assert yourself?

This thread has nothing to do with making a business decision and everything to do with you trying to cope with your biggest emotional scare, on a business that you have not yet started.

If you only have 2 options, that means you have not found or realized that there is a third one.

Considering that you have not even gotten into the market yet, if you kill this idea right now, you won't miss out on revenue. You will miss out on skills, experience and the growth of thick skin that will be necessary to survive, not only now but for the rest of your life.

How?

- You won't know what launching really feels like and all the nuances that come with it.
- You won't push through adversity because someone raised 60 million (someone is always raising 60 million, in every industry, all the time)
- You blind your self from what I call "hitting the pavement" to find the third outcome (I thought of 5 marketing pieces I could use because a competitor raised 60 million... to my advantage without knowing your product)
- You miss out on lifetime connections and friends who see you pushing yourself and respect that.

I think you get the point, but considering you don't actually have a business yet, it is evident that you are having a hard time comprehending how you would compete with someone that received $60 million.

This is an unnecessary analysis not worthy of your time. Play on a landscape that is REAL to you. Try to get your first sale, then your second and keep going.

The Journey regardless of the outcome, will set you up for a lifetime of insight.

 

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[DaveC]

Scenario:

BUT you aren't worried because you have a killer USP that sets you aside from them

So you nearly have a prototype, and is the USP still the case? Then keep going.

Customers don't give a #%^$ how much funding you have, only if the product works for them.

Get a sale and go from there.

 

[AgainstAllOdds]

The first person to the party is sometimes the first drunk out the door.

Really wise words. And of course they're coming from Yoda.

 

[Dwight Schrute]

Really wise words. And of course they're coming from Yoda.

AgainstAllOdds.

I always liked that name. Perfect theme for this thread.

What if we summon our collective fastlane-power and help OP stand up against 60Mio little excuses?

@Canuker
What industry are we talking about?
(No need to tell your exact niche, we understand this)

 

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[OscarDeuce]

At a newsstand, on the front page of a magazine amidst a sea of other magazines, you see your biggest (soon to be) competitor...

They just raised 60 Million dollars in strategic funding.

Sell to 'em...

 

[RHL]

I'd be thinking "If they got investors at 60 million, people must think that the business is worth even more than that, maybe $100M. Therefore, If I can capture just 8% of that business, I will have enough money to retire."

This kind of thing should make you want to get in more, not less. @throttleforward , for example, went into an industry where there are already players worth billions-Household names, not names backed by VCs, but by their own NY Stock Exchange letters.

Because capturing just a splinter of that industry for yourself will make you a legendary success.

 

[LateStarter]

You know, I see this a lot and frankly it really pisses me off. People want to give up on an idea just because someone beats them to the punch.

Seriously?

If that's your idea of tenacity, then pack it in now and go back to a 9-5. You've got to be smarter and work harder than that to achieve your goals.

Face reality. You're going to have competitors.

Every day someone will be competing for your customers and trying to eat your lunch. It's unavoidable. If you're not willing to fight for it then why are you doing this? So, at the risk of sounding cliche by quoting a movie (Whiskey Tango Foxtrot):

"Embrace the suck...move the F*ck forward."

But you've got something in your favor. You know what that is?

Business is not static!

It's dynamic. It changes every day on both the customer side and the business side. Each day you have a chance to to do better than the next guy. A chance to get one step ahead of them. To understand the customer better and carve out your space.

Whether they move first or you move first doesn't matter. Wake up!

First movers advantage is a fallacy!

• Did Apple invent the Smartphone? No. Who did? Palm-F*cking-Computing. And where is Palm now?

• Did Sony or Microsoft invent the gaming console? Where is Atari now?

• Did Google invent the search engine?

• Get the picture yet? Good.

If you think your idea is 100% original you're likely kidding yourself. Personally,

I pray to God that I never come up with an idea that is 100% original!

Know why? With 100% original ideas you've got a MUCH bigger battle ahead! Instead of waking up and going to toe-to-toe each day with a competitor over a customer, you have to create the whole F*cking market! If you don't have the chops to compete, there's no way you've got the balls to make your own market! No one knows who you are, what your product is, what it does, or why they need it.

This is not a field of dreams.

You don't get customers just by inventing shit. People don't beat down your door just because you've got a good idea. Ask Dean Kamen about his Segway. He even got Jobs and Bezos to invest in it and STILL couldn't make it a success! Then someone makes the Hoverboard and makes millions on the ideas even after it catches fire! (ok, so that was a bit of a tangent but, you get the idea...)

Instead, when you have a competitor, you get to coast a little. You get to ride the wake of the first mover. Let them plow forward and generate the market. You get to watch their moves and analyze every step and misstep and capitalize on it!

It's an advantage to be #2

Stop pitying yourself. You've been given a great opportunity. And the market has put you in the best position possible.

Now what are you going to do about it?

 

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[eliquid]

You act as if you can't be #1 in the future.

Even if you can't, you act as if #2 or #3 can't compete and make tons of cash still.

Lot's of #2's and #3 banking hard... look at Burger King, Dominos, Yahoo, etc....

 

[JAJT]

With 60 Mil your competitor is going to be moving fast and hard - hopefully they will be making mistakes their customers care about. You should notice them and address them in your own offering. Shout from the rooftops and post your advantage over them everywhere.

Also, as Gary Vee would say - Outcare them. It doesn't matter what amount of money they have, if you can outcare them, you'll be successful. They may be on the track to being huge - so be small. Embrace it. Care for every customer and potential customer. Follow up with them. Talk to them on social media. Show them your wounds and battle scars and chinks in your armor and explain what you are doing and that you appreciate that they join you on the journey.

Be the #2 guy. Not a #2 guy, but THE #2 guy. People should be googling "Brand X or Brand Y" and you should be one of those letters. There's huge money in being #2. Especially since you'll have a direct line of sight to an exit strategy when they want to buy your market share.

I worked at a very small Canadian company called MyFax about a decade ago. We were maybe 50-100 employees when I joined on. The #1 player was eFax and they were everywhere - it was the household brand in the industry. I'd guess thousands of employees to our < 100. We were a second thought in the market. But we outcared the competition. They answered the phone with representatives in India who didn't speak the language, we spoke English (Canadian English, but still!). They read from scripts, we talked about their dogs and kids. They said they hated cancellation fees and we said we would never dream of it. We outcared our way to end up as such a thorn in their side that 9 out 10 of our customers were former eFax customers. Eventually they were bought by eFax for a huge exit price. Everyone won and went home happy. Well except me, but that's a different story that would likely be called "How to give up $40,000 to save $800"

 

[Ubermensch]

The player that dominates has no competition.

I'd be thinking "If they got investors at 60 million, people must think that the business is worth even more than that, maybe $100M. Therefore, If I can capture just 8% of that business, I will have enough money to retire."

This kind of thing should make you want to get in more, not less. @throttleforward , for example, went into an industry where there are already players worth billions in extremely competitive niches-Household names, not names backed by VCs, but by their own NY Stock Exchange letters.

Because capturing just a splinter of that industry for yourself will make you a legendary success.

The wisest, smartest advice in this thread (above) was completely ignored.

Typical.

Many entrepreneurs become very wealthy by obtaining mid-sized to semi-large companies ($10,000,000 - $5,000,000,000 in annual revenue) as clients.

A neophyte $60,000,000 company has tons of unexploited potential. If you are already a player in this (hypothetical?) game, you should be able to spot these potentialities with Bobby Fischer-style accuracy and acumen.

 

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[RahKnee]

Have you considered approaching them to get a buyout offer? With that kind of money on hand, if you have a decent business, they might be interested in eliminating potential competition by putting a lot of money in your hand.

 

[TheTruth]

Have you considered approaching them to get a buyout offer? With that kind of money on hand, if you have a decent business, they might be interested in eliminating potential competition by putting a lot of money in your hand.

He hasn't even gone into the market yet.

 

[Ninjakid]

The player that dominates has no competition.

Fastlane students, etch this in stone and put it on your office desk where you will see it everyday. Whether you follow this or not will determine the level of business you command.

you should be able to spot these potentialities with Bobby Fischer-style accuracy and acumen.

Extra brownie points for the Bobby Fischer reference

 

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[Kid]

Find investor.

 

[ZF Lee]

If they have to use MONEY instead of providing better for NEEDS to beat you, you have already won.

Just because they have $60million doesn't means that they can beat you. I have seen and read of companies that raised shit-ton of cash only to crash and die because of fraud (pimping up the valuations based on hype) or they started being wasteful.

Remember MJ? His company got bought over and the guys started blowing all the capital on wastage like t-shirts and customised water bottles

 

[TonyStark]

Lol

 

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[MidwestLandlord]

I've noticed this forum has a habit of raising old threads from the dead haha.

Let's see...

One major competitor in business or...

...competing with 99% of people in the slowlane.

Which really has more risk?

(not saying "go for it" OP, that's for you to decide. But this is a mindset issue. You will ALWAYS have competitors. If you hold out for that industry with no competition, you're gonna be waiting a long, long time...)

 

[ZF Lee]

I've noticed this forum has a habit of raising old threads from the dead haha.

Let's see...

One major competitor in business or...

...competing with 99% of people in the slowlane.

Which really has more risk?

(not saying "go for it" OP, that's for you to decide. But this is a mindset issue. You will ALWAYS have competitors. If you hold out for that industry with no competition, you're gonna be waiting a long, long time...)

Commandment of entry!

The entry barrier to the sector must be pretty high for the raising of a$60 million campaign to take place

 

[miked_d]

@Canuker - update?

 

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[Angelic]

I would find it extremely motivating, if they got funding for 60 million, as other have already said, there is a lot of money to be made. I would watch very closely what they do and find any possible way that I can better the mistakes that they make, or improve upon what they put out.

 

[Dougema]

I would find it extremely motivating, if they got funding for 60 million, as other have already said, there is a lot of money to be made. I would watch very closely what they do and find any possible way that I can better the mistakes that they make, or improve upon what they put out.

Agreed. Nobody(in sane mind) would invest 60mil on something that would not be worth it. Thrust forward OP you are most probably in the right place!

 

[Canuker]

Haha man people like digging up old threads!!

@Canuker - update?

I ended up throwing this one on the back burner. The opprotunity oresented itself to move to Whistler BC which has been a life long dream of mine. Only now do I feel im getting settled enough to start looking in to a fastlane venture.

My plans have changed quite a bit though. Staying away from the physical product businesses for now.


Thanks for the support everyone! Hopefully this thread can help someone else out!

 

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[TonyStark]

He's not a competitor - you're just a fan.