HOW TO SPEND IT — PART 7
How Not to Be Discouraged as a Startup Founder in the Face of Competition
Different strategies for different markets
Recently, I coached a young and highly motivated startup founder. He had identified a problem that many business people have: information overload. He had come up with some ideas on how to better prepare and share information in a business context.
On that very day, when we had our last conversation, he discovered that there was already a productivity startup on the market. And it seemed like they had such a broad range of high-level services that it would be hard to beat them. “Should I give up?” he asked me.
That was actually the wrong question, or maybe the right question for the wrong market.
Winner-take-all markets
I have primarily started companies with a platform business model. These models tend to turn into a “winner take all” market or a “some take all” market. Customers flock to the platforms where they find the widest choice of providers. Providers focus on the platforms where the most customers are. This is a self-reinforcing process that results in only one or very few platforms remaining in the end.
