Questions

I want to start a company, but see another player in the space doing what I want to do. How do I determine the level of competition they'll be? I have an idea for a company, but after doing some market research found that there is already another website doing the same thing. Think about if I was starting Lyft and I found out that Uber had been in business for 2 years, but didn't have many customers in my region of the United States. How would I know if I'll end up doing well (like Lyft did), or if I'll end up being crushed by the competitor. And what do investors say if they know there is already another company doing the same thing?

You're not the first entrepreneur in that position - its a common problem. I'm semi-retired (consulting / project work only), a former serial entrepreneur and I've been in similar circumstances. The good news is that investors will view the existence of one or more competitors as a positive because it validates market need. However, you'll have to explain your advantage(s) and why you'll succeed. Start with a clean sheet of paper and create three one page documents: a) a clear description of your planned offering including the customers it serves, the need it meets, the value it adds and your success factors b) a side by side comparison of your offering vs. your competitor's on the basis of features, functions, services, etc. from the customer's perspective and finally, c) the advantages and disadvantages of your offering vs. competitors. The answer as to your question about whether to enter the market should emerge from that evaluation. If you're offering is EXACTLY the same as your competitor's, the first mover has a BIG advantage. If that's the case, you'll have to modify your offering to create a clear advantage in some part of the market. I'd be happy to help you with the evaluation or the planning process.


Answered 3 years ago

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