Competition is for Winners

on how to embrace it productively

If you’re an engineer looking for a new career opportunity, apply to attend our next in-person startup showcase on August 28th in SF, to meet founders of the most promising, high growth startups in our network.

---

I’ve been watching athletes at the top of their game at the Olympics, marveling at their amazing performances under enormous pressure, and thinking a lot about competition. 

For most of us, our performance isn’t under the scrutiny of a global stage — but, if you’re a founder, you’re likely an extremely competitive person. It feels vulnerable for me to admit that I’m extremely competitive — if I spend my time doing something, I want to be the very best at it. I won’t enter races unless I think I have a good shot of winning them.

If you’re trying to build something new that creates value for people, it’s guaranteed you’re going to run into competition. Gen AI is a real and newly emerging opportunity and lots of smart people see this. For every startup building a foundation model or working in AI codegen, or building a vertical application layer for AI (e.g. AI sales assistant), there’s at least a dozen other startups going after the same opportunity.

Founders You Should Know is my ‘startup’ and I have most definitely encountered competition. There was a time last year when at least a dozen people emailed/texted/Slacked me to tell me a well-known accelerator adopted a program of the same name as ours, with one minor word changed. I’ve worked on our branding and copy and iterated on our showcases for hours, weeks, days, and years, only to find my words on someone else’s landing page. I’m sharing these stories with you only to say, I get it. I’m a fiercely competitive person who has encountered competition in a space I care very much about — one that is deeply personal to me. 

Play your own game. Don’t let his casual clothes and lack of professional equipment fool you. At his fifth Games in Paris, Dikec won silver — and became a viral Internet sensation.

I’ve also talked to a lot of founders who have also encountered competition and here’s our best advice:

1. Embrace competition. Your first reaction will probably be anger. Frustration. The competitive urge to confront them. Because if you’re building something new and spending all your time and energy on it, there’s a good chance your identity is wrapped up in it, so competition feels like a deeply personal affront. But if you’re doing anything remotely interesting where there’s genuinely a transformative opportunity, other people will also see that it’s an opportunity and some may go after it with their own approach. And in fact, the more you succeed, the more you’ll draw the attention of competitors — so you’ll actually probably have more competitors come out of the woodwork as you hit escape velocity or prove out product market fit. Competition is a strong signal that you're onto something, so when you see it, embrace it!

2. Do a little soul searching and double down on your own advantages. My husband likes to remind me that everyone is playing their own game. I don’t have a large existing venture fund, a technical background, years of working at a startup, or any legible traditional experience in tech. Your advantages are unlikely to be those of your competitors. I’ve thought a lot about my own advantages in building community — one, is that I am a preternaturally good judge of character. I think this comes from spending almost 10 years living abroad and moving every 9 months. If I weren’t a quick read of character, I would probably have been kidnapped, raped, or at the very least, mugged many times over. It’s taken a lot of iffy experiences over many years for me to hone my rapid bs-filter. Lots of people have observed I have a community of incredibly talented, humble, and genuinely good people around me — it’s no accident and for sure, my ability to tell within a few minutes whether someone is bullshitting me and whether this is someone I want to spend more time with has a lot to do with my ability to curate great people into my own personal networks. 

   Maybe your advantage is that you have a rolodex of potential customers because of your past experiences and you’re able to hit the ground running on getting great design partners. Maybe you’ve spent the last 5 years at a high-growth startup recruiting almost 100 people and now you’ve got the best network to recruit from. Maybe you have a strong network of industry experts that you can invite onto your podcast to build your own emerging brand. 

   Figure out what your unique advantages are, be honest about what they are, and double down, triple down on those.

3. Use tactical paranoia about the competition to push harder. Andy Grove wrote a book called Only the Paranoid Survive which highlights the importance of staying vigilant to competition and being able to adapt and respond quickly to changes in the market. Even if you’re the “talk of the town” like OpenAI may be recently, you have competitors like Anthropic providing products which handily beat some of your flagship offerings. No one can afford to be complacent, no matter how big or established they are — winners are aware of what their competitors are doing and use that as fodder to push even harder. There’s paranoia that isn’t productive – that’s noise that takes away time and mindshare away from focusing on building something great. Then there’s "tactical paranoia” which is an awareness of what your competitors are doing that informs the strategy you take to win. For example: don't be paranoid about every little product launch coming out of competitors (that's noise) but do be paranoid about what your customers are saying about your competitors and why people are picking them over you.

4. Recognize you are unique even if there are lots of competitors. Your experiences and the people you spend your time with have shaped your view of what’s valuable to build. I spent 4+ years looking for a startup job when I moved to the Bay Area and I couldn’t break in because I didn’t know anyone. It was brutal, traumatic, and a huge blow to my self-esteem —  I went into $30k+ of debt while I was looking for a job. This experience has heavily shaped my view on how important people networks are to finding your way to the best startup opportunities and how impactful connecting people to great opportunities can be. Your experiences will shape your worldview, your values, and what you build in the world. No one else has the same set of experiences as you, so your competitors probably aren’t as close to you as you might believe they are. 

5. Focus on internal motivation versus external. Competition is an external motivation. As Dennis Xu, formerly the founder of Mem and now the founder of an AI text-to-app startup, Adaptive Computer, says “find joy in the craft itself.” If you focus only on trying to beat your competition, you make different decisions than if you’re working to master a craft or develop true expertise. With the former, you tend to work only on the things you already know you’re good at, or you take shortcuts to get ahead faster. With the latter, you make the effort and take the risk to learn things that feel uncomfortable or challenging at first — for Dennis, this was coding — until GPT-4, which he said lowered the friction to a point where he felt like he could learn anything. Following your curiosity and focusing on enjoying the process of building and mastering something new, sets you up to make decisions that are more likely to lead to success in the long term.

6. Use competition as a source of inspiration. Look at what your competitors have built, what their customers are loving, and use these data points as real-world product discovery. Michael Rosenfield, the founder of Decipher, knows that his potential customers rely on Sentry for error monitoring. Instead of ignoring the “giant in the room,” he’s doubled down on drawing explicit comparisons between Sentry’s product and his own. He’s studied all the features they offer and their product’s UI and has written many blog posts like this one, pointing out these differences to any potential customers. 

7. Not talking about what you’re building does you a disservice. I hear from a lot of founders, especially in the robotics or deep tech space that they’re in stealth and can’t talk about what they’re building. Then they ask me if they can present at FYSK. If you’re standing in front of a room full of people who are considering what’s next and you’re not willing to share what the product is, what your traction, revenue or growth is, and who you’re serving, you’re probably not going to attract the best talent. You don’t need to be the loudest person on X or LinkedIn — I find those people as obnoxious as you probably do — but being transparent with the right audiences will serve you more than trying to hide what you’re doing from your competition. Ideas are cheap anyhow, the best teams win not by protecting their ideas but by out-executing the competition by serving customers better.

8. Don’t let competition be a distraction. It’s so easy to let competition get in your head and it’s easy to waste time and emotional energy reacting to it. I have to remind myself that the energy I spend worrying about what my competitors are doing or getting angry about it is time and energy I’m taking away from being great at being me. Keep observing what the market needs, spend that energy listening to people and trying to serve them better. Figure out where you have advantages relative to everyone else and focus on those things. Everything else is noise. 

Get comfortable with competition and figure out how you’re going to respond productively to it —  it’s inevitable if you want to do anything great and win.

===

Founders You Should Know attracts highly competitive founders – as does gen AI more broadly!

We’d like to thank a couple of our most competitive founders in AI for feedback on and contributions to this piece: 

Dennis is the founder of the AI text-to-app company, Adaptive Computer. He admits to harboring “unhealthy levels of competition,” inspired by his early childhood idol, Kobe. Dennis is also an avid poker player and his competitive nature drives him to research his opponents’ weaknesses before and after games. If you’d like to win with Dennis, he’s looking for a talented design engineer to work with him. 

Michael is the founder of Decipher, an intelligent error monitoring system that makes debugging faster and easier with AI. AI codegen is perhaps the most competitive space in today’s startup landscape. Michael’s the perfect example of someone who has embraced the competition both from existing giants in error monitoring like Sentry – as well as new startup entrants in the space. If you’re a developer and would like to give Decipher a try, contact: michael@getdecipher.com.