Don't Fear Your Competitors

Your competitor launched last week. They have a beautiful website, a slick demo video, and a press release announcing that they're "revolutionizing" your space. You feel a knot in your stomach.

Take a breath. In the era of vibe coding, a polished website and a working demo can come together in a week. Neither tells you much about the business behind them. Paying customers, an experienced team, and sustained growth are much harder to manufacture.

After several decades of building companies, one of the most useful lessons I've learned is that competition often matters less than founders think. Many competitors, especially in a new niche, are weaker than they look. The question that decides your fate is usually more specific: Is there a viable market, and has anyone captured it?

Three experiences taught me this.

Deadline: Building the Better Tool#

Years ago at Frantic Films, we needed a render manager. The existing option, Backburner, wasn't doing the job well for us. We built our own tool in-house, which became Deadline.

We knew we had a real need, but one studio isn't a market. So we talked to other studios that weren't our direct competitors. They had the same problem. Blizzard Entertainment tried Deadline and loved it. That was our first real signal.

Then we did something I'd recommend to any founder with a new product: we pre-announced a beta and asked everyone who wanted access to complete a survey. We received about 150 responses, a substantial number for a specialized enterprise tool. That likely represented around 100 studios, plus a number of individuals. More importantly, the survey showed us the shape of the market: what people were using, whether they were happy with it, and what they needed.

There were established competitors, including Smedge and Qube. Their existence didn't stop us. We had validated demand, refined the product around real requirements, and launched a beta that worked. Over time, many of their customers switched to Deadline.

The opportunity came from understanding an underserved need and delivering a better tool.

Clara.io: When Users Don't Become a Business#

Clara.io was a web-based 3D content creation tool, in the spirit of Blender but in the browser. Tinkercad and 3DTin were exploring the same broad space with a more CAD-like approach. We weren't direct competitors, but we shared an idea: make 3D tools accessible on the web.

Clara.io reached around 1.5 million users. That looked like enormous validation. But many of those users were students, and few had the budget or need to pay for what we offered.

At the time, browser-based tools had limited functionality compared with desktop software. Their strength was accessibility. That made them attractive to people who wanted to experiment or learn, but it didn't automatically make them products with a sustainable paying audience.

For us, that broad user base did not translate into a viable business for the general-purpose tool we had built.

If we had spent our energy worrying about Tinkercad or 3DTin, we would have been studying the wrong problem. The pressing question was who would pay us, for what, and how much.

Users are evidence of interest. Revenue is evidence of a business.

Threekit: Becoming the Competitor to Fear#

Clara.io did lead somewhere valuable. Enterprises began asking to use our platform to build product configurators. Our first two deals, with Steelcase and Crate & Barrel, were each worth around $100,000 per year.

Those deals pulled us into a market with clear evidence of willingness to pay. We believed the broader opportunity was worth hundreds of millions of dollars.

This was the one time in my career when I was truly afraid of competitors, and the reason matters. We were a self-funded team of about 15 people. I could see the limits of growing organically: even if we became five times bigger over the next five years, we could still capture only a small fraction of a large market.

Meanwhile, a well-funded competitor with an experienced team could out-advertise us, out-sell us, and establish the customer relationships we wanted.

I was afraid of a specific competitive threat: a company with capital and a team that had executed before, entering a proven market while we moved too slowly.

So we became that competitor. We raised venture funding and brought in experienced people with a track record of building businesses. That combination of product, experience, funding, and marketing helped us win large, multi-year deals with major brands.

What I Look for Now#

Start with a Viable Market#

Checking whether competitors exist tells you very little on its own. Sometimes their presence is useful evidence that demand may exist.

The more useful questions are: Are there enough customers who want to buy this? Will they pay significantly more than it costs you to deliver and support it? Can you reach those customers at a cost the business can sustain?

That margin funds the company and its growth. A long list of competitors tells you much less than a clear answer to those questions.

Distinguish Competitors from Incumbents#

A competitor with a product is different from an incumbent that has captured the market.

If a company already serves half the Fortune 500 and is still growing, entering its market will be hard. You'll need to displace existing relationships and workflows, and the incumbent can respond to your product and marketing differentiation.

An attractive opportunity is a viable market that nobody has captured. Several small competitors with little traction may still leave plenty of room for a company that executes well.

Assess Competitors Rationally#

Competitor analysis is useful when it replaces anxiety with evidence. I look at four things:

• Funding: How much capital do they have, and who has backed them?
• Team: Have the people building and selling the product succeeded before?
• Traction: Are customers paying and renewing? What evidence supports the logos on the website?
• Growth: How quickly are revenue, customer adoption, and the team growing?

Public profiles, funding announcements, customer references, and hiring trends can provide clues. They rarely give you the whole picture, but they help you ask better questions. A slick website alone answers none of them.

Validate Demand for New Products#

Market validation is harder than competitor analysis. If your product is truly new, you may not know how many potential customers exist.

Run tests like Deadline's beta survey. Talk to prospective buyers. Find out what alternatives they use today, what those alternatives cost, and what would make switching worthwhile. Where possible, move from expressions of interest to paid pilots or contracts.

If a competitor has closed deals, study who buys from them and how many similar companies exist. Those customers can help you understand the market's size and needs.

Don't Underprice out of Fear#

Undercutting competitors is another easy response to anxiety. But a lower price won't fix an unclear value proposition.

Good enterprise sales starts with understanding the customer's need, showing how your product meets it, and quantifying the value they'll receive. Your price can then capture a fair share of that value.

Premium pricing has to be earned. You need to demonstrate the outcome, understand the alternatives, and deliver what you promise. Confidence can help communicate professionalism, but it cannot substitute for customer value.

Lower pricing can be a deliberate strategy. It deserves a better reason than being afraid to ask for more.

Become the Competitor to Fear#

Fear draws your attention to other companies' websites, press releases, and price lists. Those are easy to study. The harder, more useful work is understanding the customer, testing willingness to pay, and delivering enough value to build a durable business.

Find a viable market. Validate it. Understand whether anyone has captured it. Price on value. And if the opportunity is large enough, build the team and secure the resources to pursue it properly.

That's how you become the competitor others worry about.