3 Kinds of Competitors to Protect Yourself Against in Startup Tech Companies

Protecting yourself against future competition is essential for unique new startups.

No matter how good or how unique your startup idea is, there’s always room for competition to come in and start cannibalizing your audience. They might come from nowhere as a kind of “great minds think alike” development, or they may result from an entrepreneur becoming inspired upon seeing what you’ve built. In any case, protecting yourself against these emergent competitors can save you a lot of repositioning and scrambling later.

These three types of competitors are the most important to watch for:

The Clone. The clone is a piece-for-piece replica of your business. They have the same offerings, the same model, and the same customer base—and of course, they’re legally distinct. This is one of the most dangerous types because it directly threatens your user base, but it’s also the easiest to navigate around. All you have to do is find some unique way to be better than them, preferably a way that is not easily replicable, and launch it as soon as possible. The key is differentiation.
The One-Upper. The one-upper is very much like you, except they claim to be better in some small way. They might offer an extra product or service that you don’t. They might be a little cheaper. They might be a little faster. The problem is, they’ve created enough of a gap to make your customers favor them. To respond, you can do one of two things—you can add even more improvements to directly compete like lowering your prices (though doing so could hurt your profitability), or you can differentiate yourself by targeting a different segment of the audience. For example, you might limit your products and services to better serve one key demographic.
The Hybrid. The hybrid is an indirect competitor. Rather than competing with you directly with a similar business, the hybrid includes elements of your business in a completely separate industry. This competitor is hard to address because it serves a different market, but is also less dangerous than the above two types. Your greatest strength here is that you’re a dedicated niche provider, so emphasize that.

The better you prepare for possible competition, the more likely you’ll be to succeed in the long term. Be proactive and think ahead—before they actually emerge.

About the Author

Jose Vasquez is a serial entrepreneur and tech specialist dedicated to helping startup tech companies grow and succeed. As the founder of Build. Brand. Blast., Jose has worked with dozens of enterprises to find direction, gain momentum, and achieve results.