[lylemckeany]

>An investor or friend shouldn't be the first one to tell an entrepreneur about someone new in their space.

This line resonated with me. I know the stomach-dropping feeling of someone mentioning a potential competitor that I've never heard of. I usually play it off and say, "Thanks, I'll definitely check it out" and then immediately Google it on my iPhone as soon as possible. Luckily, in my research I haven't found anything all that similar to what I'm working on.

This brings up a corollary question: Assuming I have a pretty well-informed view of the competitive landscape and I can't seem to find anything that solves the problem in a similar fashion, how do I sufficiently answer the inevitable question from investors about my competition? I've often heard people write and say that business ideas ALWAYS have competition, the tricky thing is that the competition isn't always immediately obvious. Answering that a startup doesn't have direct competition leads to skepticism, therefore creating distrust right off the bat when it may not be warranted.

[bsirkia]

That's a great question. I think the only thing you can do is address who your competition is, even if they're only tangentially related. I usually follow a pattern of "X competitor is doing Y, which helps our target customer solve A and B need but not C and D".

I think it's worth finding the closest competitor no matter how far away they are, even just to signal that you've done the research.

[lylemckeany]

I think it's better to mention the tangential ones than to omit them because it shows that you've really thought through the competitive landscape.

Competition is also not a bad thing. If there are a few startups vying for attention in a certain space, it means there's obviously value there. You have to prove to investors and customers that you're going to do it better and ultimately win the lion share of the space.

[johnrob]

You usually need to prove one of the following:

1) How you'll beat the competition

2) Why people will want your product

Are you sure you shouldn't be focusing on 2?

[lylemckeany]

The situation I provided was hypothetical, but one I've thought of previously. I would agree that #2 should be the focus, for sure.

[hershel]

If you did your research seriously, i believe sharing the results(indirect competitors) and maybe the process(keywords searched, etc) could help build trust .