I’ve spoken to hundreds of investors both here and in the UK and they all agree. A misunderstanding of competition is a big red flag. A sign not to invest.
How do they know that the Entrepreneur doesn’t know what competition is?
They hear phrases such as “There is no competition.”, “We are unique”, and “We’ve searched everywhere and can’t find anyone doing the same as us”.
So, what is competition?
Competition is “an alternative way of solving the same problem that you are solving.” It’s not the technology. It’s not even individual features. It’s all about the problem you are solving for your customers. There is another way to solve the problem because that’s what the customers are doing right now. So, what is it? Then there are other people with products that solve that problem. What are they? All of these are your competition.
There’s another important fact we learn about Competition in the Lean Commercialisation Program Discovery Course.
To persuade customers to use our solution, we must demonstrate that we are
10x better than their current solution, whatever it is. We must be 10x better so that our customers will buy our solution, abandon their current habits, and learn new habits.