A version of this article previously appeared on Forbes.
Tracy DiNunzio, Founder and CEO of Tradesy, recently shared her insights regarding the best approach for entrepreneurs to address competition. Tracy's frank, pragmatic and somewhat controversial comments were presented as part of UC Santa Barbara's Distinguished Lecture Series. (Note: I am an investor in Tradesy via Rincon Venture Partners.)
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You can watch a 2-minute excerpt from Tracy's talk below.
1% Chance You're A Freaking Genius
Tracy addressed the issue of competition head on, telling the largely student audience, "As I started to think about launching Tradesy, I looked around and there was a lot of competition but... competition's a really interesting thing. If you're doing something, or thinking about doing something, and nobody else in the world is doing it, then there's a 1% chance that you are a freaking genius and there's a 99% chance that your idea sucks. If there's a big market opportunity and something that customers really want, you're probably not the only person who's going to think of it."
In the early days of launching GoToMyPC, a remote screensharing application, I was constantly told that, "Microsoft is going to kick your ass." At that time, a typically inferior Microsoft remote access product(NetMeeting), was bundled with every copy of Microsoft Office.
However, rather than cower at Microsoft's immense market influence, we realized that the remote access market was too immaterial to warrant their attention. This allowed us to create a suite of SaaS solutions under their radar (GoToMyPC, GoToMeeting, GoToAssist, etc.). We eventually sold our company to Citrix, which went on to grow the products into the world's third largest SaaS offering. To this day, Microsoft remains a tertiary player in the remote access / remote meeting market.
Just as Tracy was undeterred when doctors told her she would never walk, she is likewise not intimidated by her competitors, stating, "And so, competition is like this fallacy, right? The obvious question I got all the time, 'So why would you do this, there's eBay, right?' And now we have ten other competitors, and they all have more money than we do. 'How are you going do this? Other people are funded'... that's what I would always hear.
All I know is that I've seen giants fall. I've seen well-funded companies fall apart. I've seen people with perfectly great feet not be able to dance. I've seen a lot of weird stuff."
Competition Is A Lie
Time and money are usually an entrepreneur's two most significant resource constraints. As my Partner at Rincon, Jim Andelman, often tells entrepreneurs, "You will always encounter more tasks each day than you have the time or energy to complete. Successful entrepreneurs consistently tackle those issues which maximize the impact of their waking hours." Time management is such an important component of a startup's success that, done well, it can become a competitive advantage.
Tracy echoed this sentiment, encouraging the students to, "Stop looking at them (your competitors) and just focus on your goal. That applies everywhere across the board. Like, is that person better than me? Smarter than me? Going do better than me? Is that company better than me, smarter than me.
The only thing you have as an entrepreneur... is (limited) time. And every minute spent looking at the competition was a minute I didn't spend getting where I was going. So, it's not to say I never did that, because I definitely looked at some competitors' sites and went, 'Oh no, they figured that thing out!' but the more you can avoid that, the better."
Tracy concluded her comments regarding competition by stating that, "Competition is a lie. Like don't let anyone tell you, 'Your idea's no good because someone else is doing it.’ That means that there's room for it, and you can beat them."
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