Is competition bad? This is always a hotly debated topic. How many entrepreneurs, when asked about competition for their new venture, respond “there is none?”
Not only does that response make the entrepreneur look foolish by saying that there is no competition, but that lack of competition does two things:
- It shows that the entrepreneur did not do his homework (going back to “foolish”)
- It un-validates the market
First of all, it really does make the entrepreneur look foolish. There is no other product or service, anywhere, that does what you are trying to do? Really? At all? Okay, so they may not be doing exactly what you are, down to the last detail, but are there other products or services that come close? How about substitutes? Even the status quo is the competition.
An entrepreneur must think of every potential competitor, even if the only competition is “no action”.
Assuming that there is not even a substitute product (other than doing nothing), by stating that no one is playing in your field could be a turn off to investors. Why is no one playing in this field? Could it be that there is no economic reason to enter the market? Is there no money to be made? Like selling ice to Eskimos? (With global warming, this might just be a viable market now!)
Perhaps the niche is simply to tight. What if you expand a bit, do you now see competition?
But what if… just what if you did find that one thing that no one has ever thought of before and there really is no competition (except there always is the status quo), then you better be able to prove that no person has thought of it before and you really are the first.
This is not impossible, and I hope that you do find that needle in a haystack, but it is a bit improbable these days. If it is true though, you must be able to prove that there really is an economic model behind it.
The bottom line is, if you enter a market with no competition, you have your work cut out for you, both in finding investors and customers. The investors won’t believe you have a market and the customers don’t know there is a pain you have a solution for.
Competition is good; a fragmented market with lots of small competitors is even better. Look, everyone is jumping in, but no one has significant market share! Whoo Hoo!