A Competitor Launching A Similar Product Is Actually Good News

A case like this. When you actually run into it yourself, your first reaction is “why me, are you kidding me!” But objectively speaking, this is one of the typical consultations we get all the time. Situations like “I’ve been beaten to it (panic)” or “there’s no novelty left even if I launch now” tend to get taken pessimistically, but let’s start by thinking of it as lucky.

First point: you can think of it as having gained one piece of confirmation that your hypothesis wasn’t completely off the mark. The fact that someone else is doing something similar means there are other people out there who agree with that concept too.

Just like you, he must have come up with an idea, worked out a business model, looked for people to help, looked for investors, looked for a partner, and cooperated as a team to get all the way to a product release. And he must have gotten there, without exception, on the basis of a lot of support from a lot of collaborators — whether that’s effort or money, in any case.

Put the other way around, that means he has proven to you that your business has just as much potential to attract that level of collaborators. So it seems fair to think that the several challenges you’re facing right now can be solved with extremely high probability. This is clearly good news.

Here’s another point: there’s a common saying about first-mover advantage, but being first isn’t necessarily an advantage. Being the first mover means being the first to do something nobody has ever done before. In other words, he doesn’t know what lies ahead, especially what kind of typical failures exist. In fact, nobody does.

There’s also a common misconception here: cases where the first mover goes on to dominate the market as-is are relatively rare. For example, before Facebook, there was a first mover called MySpace. But companies that did similar things after Facebook stood little chance of winning, because Facebook had already come to overwhelmingly monopolize the market. So, paradoxically, unless you get all the way to a monopoly, the “first mover” medal doesn’t carry that much weight. Though it does feel good.

Before the iPod, there were a number of portable audio players, going back years and years. But there were various issues involving usability, how you loaded music onto the device, and storage capacity, among other things. The iPod solved some of those issues and became a huge hit. It was almost as if it swooped in at the very end and snatched away a market that other companies had spent all that time warming up.

Being first is a disadvantage: everyone is watching your every move. Coming later is an advantage: you can decide your strategy by watching how the first mover plays it. Seen that way, maybe the moment a competitor shows up is something you should genuinely dance for joy about, being so lucky.

The content of this post is an excerpt (original text) from the following book. If you’re interested, please go pick up a copy.

The Shape of a Happy IoT Startup

The Shape of a Happy IoT Startup

Originally published in Japanese at https://clazytech.com/2022/09/1140/. Translated with LLM assistance and reviewed before publication.