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?

As mentioned before, having competition is a good thing to the eyes of an investor. Moreover, it shows you've done some research.

Try to understand the apparently small differences between you and your competitor. E.g. Is he selling in the same region? To the same type of people? Approaching customer using the same means? All these can be used as a differentiation point, which could be enough for both companies to co-exist.

Also try to evaluate the size of the market: how big is it? Is it expected to grow? If it's a growing big-enough market, there's no reason why you wouldn't succeed as well.

Apart from these business concepts, in the end it all goes down to the specifics of your startup idea. Try to get industry-specific advice on that.


Answered 3 years ago

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