How Much Should I Worry about Competition?

Most founders worry too much about their competition. They follow them on social media, scour the news for updates, and have Google alerts set up on competing founders and executives.

And it’s not doing their mental health any favors.

You do need to have your finger on the pulse of the competitive landscape, but for your own sake, you need to be deliberate about how you keep tabs on your competitors. It can lead to a negative emotional cycle if you start every day focusing on the competition while having your bagel and coffee.

In my experience, unless you’re losing deals to specific competitors on a regular basis, it’s more helpful to keep your eyes on your own paper. Your number one goal should be serving your customers—not perseverating over your competitors’ every move.

There are only two things you should care about when it comes to competition:

High-Level Updates. If an announcement is big enough to merit space in your industry news sites, it’s probably worth paying attention to. Is your competition announcing new funding? Launching big features? Making a major shift in positioning?

Read it and understand it. But rather than losing sleep over whether you should follow suit, spend that energy studying what that tells you about your industry and your customers.

Deals You’re Losing. If you’re losing deals to a competitor, you should figure out why. Is it because you lack specific features? Is it because of your pricing? Do they have SOC 2 compliance?

Once you understand why you’re losing deals, you can decide how to address those objections. Maybe you need to carve out a new position in the market where those features aren’t as necessary. Maybe you need to revamp your pricing or look into securing similar certifications.

Conversely, here’s my rule of thumb for what you should ignore about your competitors:

Low-Level Details. From the outside, it might look like your competitors have their act together. But if you’re not in the room where decisions are being made, all you see is a polished image. Don’t let that polished image fool you into thinking your competitors know what they’re doing.

I’ve seen many, many companies raise millions in funding and then misprice or misposition its product, move too slow on the technical side, make a mess of its branding, or make any number of first-time founder mistakes.

Just because your competitor is acting, don’t assume it’s the right move—or even a well-thought-out move.

Their Funding. If a competitor raises funding, that’s not necessarily a bad sign for you. It’s not a sign they know what they’re doing—just that they were able to convince an investor that there’s an opportunity.

When I see a company raise funding, the most common result is that it blows through it in about 18 months. If it doesn’t have significant traction by then, it is likely to flame out.

Funding obviously works in some instances, and if you have an experienced competitor gaining traction and adding funding to the mix, that’s something to take to heart.

As a caveat, if your competition raises a lot of money—like $5 million or more—be aware they might be trying to suck the air out of the market by either offering a free solution or dropping prices.

Being Copied. If your product is successful, competitors will copy you.

Even if you don’t say it to your team, even if you never say it publicly, it’s infuriating to see someone come into your space and copy your positioning, features, or marketing. It’s even more annoying when they pretend like they’re innovating by doing so.

As a founder, it’s your job to manage your mindset and not let their plagiarism derail you. It’s inevitable in business, especially if you’re on the leading edge of your industry.

Sometimes copying gets so bad you need to enlist the help of a lawyer to send a cease and desist. Things have to be pretty blatant to get to this point, but it happens.

One way to make yourself less vulnerable to copycats is to build a moat around your business.