This is an answer I wrote on OnStartup, here is the link to the original page.
When to compete on an idea?
I spend a lot of time thinking about potential start up ideas. I come up with a couple every now and then, but when I go searching online
there is always quite a few competitors. I don't think I've come up with an idea that no one has already thought of. Because of this I've
been deterred from starting anything. Now I'm thinking I should look at the competition and decide if it is worth competing in the idea space.
What should one look for when trying to determine if it is worth competing in an idea space?
For example, I recently thought of innovative support software, but when I looked around I found that sites like Zendesk and Snap Engage
(and probably quite a few more) are already implementing the things I was thinking of doing. Based on the quality of those products, and
the amount of competitors, it doesn't seem like a space that is worth trying to compete in.
Well turn the problem around: can you think of a SINGLE startup that became big and that started something no one else was doing before?
The goal of entrepreneurship is to build a company that grows so big that at one point it stops being called a startup. And how do you grow to become a large company?
By executing in a growing market and doing it better than other competitors, both in terms of the product offered and the distribution strategy.
Besides, if you think of an idea that no one else is doing, that might mean there's no market for it, or that you're too early in the market. Do you want to be
the one educating new customers? Here's the Inc. list of the 500 fastest growing companies. The top-ranked company does payment processing: do you think that had
never been done before they started? All these companies are operating in fast-moving markets; it's just that they do a better job than others, mostly by innovating.
Note that innovating and inventing are two different things: innovating is about taking something that's already been invented, and making it work. Instagram wasn't
the first picture-sharing company; it's just that they innovated by allowing users to apply filters to their pictures. Stackoverflow wasn't the first QA site; it's just
that they made one that works. Find broken stuff in growing markets, make something that works and then scale it. And while it seems that everything you look at is
already fixed, there is and always will be plenty of stuff that sucks; it's just that you never hear about things that suck.
Just pick a growing space where you think your expertise will enable you to outperform others and do a better job than they're doing. That's when to compete.
PS: You're not alone: quite a few investors also think like you do.
answered Oct 23 '12 at 21:41