How Do You Know You Have Too Many Competitors?

brett fox
4 min readAug 16, 2021

“What other startups have gotten funded in your space?” I asked “Ray” during one of our first meetings.

Picture: Depositphotos

Ray said, “There are a lot of them. I think there are around 50, the last time I counted.”

“50! That’s a lot,” I said. “What are you going to do different?”

Ray then walked me through a detailed technical explanation of the uniqueness of his product offering. It was inspiring to hear.

“Here, let me show you,” he said. “The other competitors are all brute-forcing incremental improvement. Maybe only 2X to 3X better.”

There can never be too many competitors in a market when you have the right strategy.

“Why is that?” I asked.

“Because they are getting to the limits of what conventional technology can do.”

Ray then went to the white board and showed me the problem conventional methods would have solving the problem. It made complete sense.

“Now, let me show you how we’re solving the problem,” he said. “We’ve moved the problem from the domain our competitors are all pushing to another domain. It simplifies the problem, and, at the same time, allows us to have breakthrough performance.”

Ray went back to the white board to diagram what he was talking about. It was beautiful and elegant. I grasped that if Ray could execute on his plan, he could dominate the market.

A large part of the having the right strategy is not just your technology, but your market choices.

I was still worried. When you’re competing against 50 other companies, surely one of them will come up a similar breakthrough.

I shared my thoughts with Ray. “I know you’ve got a great idea. Let’s assume, for the sake of argument, that you can execute and achieve the performance you expect.

“It certainly would be nice to eliminate some of these competitors by choosing a different way of competing. What can you do?”

Ray smiled and said, “I’ve thought a lot about that. There are two market choices. There’s the obvious…

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brett fox

I work with startup CEOs to help them grow their businesses . I built several businesses from $0 to >$100M. Learn more at https://www.brettjfox.com