I've been working my first startup application for a couple of months out of hours from my 9-5. Not long ago a competitor surfaced and released an application which is very similar to what I have been working on.<p>They are targeting the same market and the application has the same features.<p>From what I have read so far about them they have been very successful (both financially and with creating a community of users) and the application is gaining traction. While this somewhat validates my feelings about the original idea in that it has been a great success for them, I am unsure what to do now.<p>Do I continue working on my own application and release it in a couple of months? I am pretty sure that there is enough market for it but I am no expert on marketing (far from it in-fact).<p>There are a number of older style web applications from competitors, both commercial and open source, but I feel that these are over complicated or bloated and my application is a fresh take on those with a greater emphasis on usability and simplicity (not through lack of features!) which the new competitor also provides. From research I have conducted on those they also appear to be performing very well financially.<p>Does anyone have any advice? Is this sort of thing normal and should I just ignore them and continue anyway?<p>Thanks
In 2003, me and a partner decided it'd be pretty neat if companies could deploy firewalls that filtered AOL Instant Messenger, Jabber, and MSN IM, with rules for users and groups, not IP addresses, and with automatic encryption and message relaying to keep corporate secrets off the OSCAR servers.<p>Then AOL announced they were going to go release the same thing. We had pretty much everything but the user interface done.<p>Like the man said, "In a situation like this, there's a high potentiality for the common motherfucker to bitch out". We bitched out.<p>A few months later, AOL dropped the product. Akonix and IMlogic, two companies that <i>didn't</i> bitch out, went on to gross something like 30-40MM in revenue each. I stopped paying attention to them; I assume they exited nicely.<p>Your competitors don't decide whether you're going to succeed. Your judgement and execution do. We probably would have failed even if we kept moving --- our hearts weren't in it. Is yours? If you have to ask whether you're going to keep going, maybe you should do something else.
Two things:<p>1. Respond to all user emails within 24 hours or less - even if it's just to say "thanks" or "this should be released next month". Not only will you know exactly what your users want; they'll tell your friends how quickly you responded. And of course, don't ever ever use form responses/letters.<p>2. Keep your burn rate super low. If you do that you're a cockroach - no one can kill you.
Go for it. One of the projects I am working on is Yet Another Photo-sharing Site. Here in SF the first thing people ask is "Why? Why not just use Flickr?"<p>But when I leave SF, I tell people "I am making a photo sharing site, kind of like Flickr, but how I want it." The response I get is "Sounds Cool - what is Flickr?"<p>Sites like Fotolog and Photo.net and Photobucket eventually sold for way more than Flickr.<p>The point I'm trying to make is that if the market is big enough, there will be people who want to use your product, even if there is an entrenched competitor. In fact, your competitor may not be as entrenched as you think.
Definitely don't ignore them. Learn from them. Do all you can to see what works for them and what doesn't. Pay close attention to what users (and blogs) are saying about the product. What do they like? What do they dislike? What features are they asking for? This competitor will give you they best market research money can buy - for free.
I've been reviewing web apps recently for accounting within my startup, there's a lot of offerings and most of them cover all the same functionality.<p>But even though they all do the same thing, its the <i>way</i> that they've implemented the functions that makes each app different, and has ultimately influenced my decision.<p>At this point, I have no idea what one came along first, that doesn't matter to my decision, and I didn't just pick the first one I found, I reviewed 5-6 before making a choice.<p>Another point is, that after your initial release hopefully you'll get a user base who will provide you with feedback and ideas, its up to you how you act on that feedback. You may react to your users differently than your competitors, and ultimately that too will distinguish you from them further.<p>Good luck!
I'm probably going to be the sole wet blanket here.<p>Ask yourself this question. Will your product be substantially different from this competitor's product?<p>If yes, you might want to do something else. Like what you said, this competitor has growing traction. It'll be difficult for you to break the momentum especially if you provide nothing different.<p>If you really want to fight with this competitor well, you must offer something different to the users. Eg. tumblr or posterous is like a super-easy lite version of wordpress. That's why they're gaining traction. There are probably XXX number of blogging systems out there that are similar to blogger/wordpress and they just can't break through. Those that broke through differentiate themselves well from these existing services.<p>dropbox is not like the hundred other online storage site. Their interface is brain-dead simple compared to the competition.<p>Will your product be so? That's the question you have to ask yourself.<p>I'm not saying this to be a spoilsport but to help you prevent wasting your precious development time.
Large markets almost always have room for a #2. However, unless you can make substantive improvements over their product or target a different niche that they are missing, you could be in for a hard slog.
I saw reddit as a digg.com competitor when they launched. Much, much smaller, less hyped, but guess who found an exit first? Small competitors to large, VC-funded products often do well, perhaps partially helped by the hype surrounding the leader. Jaiku would be another example.
Of course it's normal. Ask everyone from Pepsi to Burger King. :-)<p>That being said, from the sounds of it, the competitor seems to be very visible in the market. Given that, can you see that there is something that they're not doing? Is there are group of users that are under-served? Do you figure one might surface? It looks like they've got you beat feature wise, but can you go the other way even further? (Super simple?) These are areas that you can explore.<p>At any rate, keep going. You idea has been validated. It's a big world out there, odds are in the next two months you'll understand that there will be room for you, them, and probably a few others.<p>Good luck.
There will always be competition. There are probably half a dozen other companies doing similar things that you just don't know about yet. Most of the really successful companies that I can think of weren't the first ones on the market.<p>Like others have said, learn from them. Figure out some need that they're not addressing and sure up that niche and try to grow from there. That may actually lead you to a point where you're not going head-on against them, and even if it doesn't it'll give you some runway before you're really going one-on-one.
I would definitely suggest that you not give up development of your idea.<p>As someone else has already said, learn from your competition and make your product better as a result.<p>If the idea you're working on is a good one, then you're almost bound to have competition. So I see competition as a sign that I'm on the right track.<p>Keep at it! You just have to make your implementation a little bit better than the other guy.
Competition also validates the market in that some won't buy unless there is more than one supplier; the first doesn't always win (Edison had the 19th light bulb patent); and your greatest competitor is non-consumption (not this competitor).<p>There's one danger in learning from them: don't become fixated or intimidated. What you have to offer is your passion for that "fresh take", which is still your original idea, and is still real, and is still needed by people.<p>It will turn out that your "fresh take" is not identical with theirs - non-identical features, non-identical audience. It could be that yours is better.<p>Marketing is important - if you are "far from" being an expert, one way to gain experience is to have a go.<p>I want to encourage you, but courage is only needed because of the unknown. A start-up is high-risk, with many risks and many ways to die. A competitor is just one of them. But fortunately, the plurality of risks doesn't really matter, as you can only die once.
If the market supports a number of competitors that are doing OK, and you are fine with working in that market, then go for it.<p>If you were wanting to be a category-killer then it doesn't sound like your market is suitable for that. So if you're playing "Go Big or Go Home."; you should find another market.
If you believe in your idea, keep going. While they may have hit first, you can adjust your strategy now that their hand has been played.<p>This sort of thing happens all the time; few ideas are truly original.
Ask Graham's Question: Are you still creating value? Take your eyes off the greenbacks for a second - are there still more-satisfied users at the end of your quest, or is it now <i>only</i> about the money?
You should look at this as a good thing. You can use them to see what work and what doesn't. Adjust your product and add features that your competitor lacks. Any market worth while will have competitors.
Paul Graham mentioned in one of his essays that although ViaWeb faced tough competition he knew that working hard enough, his team could implement features that would force his competitors to drag themselves over rocky terrain just to try and keep up.<p>If you think there's a chance in hell, give it a go. Otherwise you'll always wonder 'what if...?'
If you love what you do, keep doing it. Improve upon what they have, whether that be the customer support, the interface, an extra feature or two, integration with other services... competition is good for you.
If you are screwed because somebody beat you to the punch - then you were screwed anyway. Sustainable companies have a lot more going for them than just being a few months early than the other guy.
there are millions of people in this country. Even now when I tell people about craigslist they ask what is that? There is always place to compete.<p>I mean look at eBay, they are in world known, but their user base is only 144 million people world wide. Sure it sounds huge, but in reality its just a tiny portion.<p>As long as there is no first comer advantage(i.e. how eBay pretty much has a monopoly on auctions), you can launch a decade later, and still manage to get up on top(i.e. Google)
You have the "second move" in this chess game of monopolistic competition. Even highly successful, technically superior, first-to-market products have been beaten out by competitors.
It's not as much about the idea as about the execution.
But your idea has been validated. And so has your idea-generation. Quit your 9-5 and start off on this full time.
what's your exit strategy? For example, if you were planning on getting bought let's say 100M - with a competing company, that might mean you might get bought for higher or lower depending on the timing. Assuming a bidding war, if someone buys your competitor first, the losing bidder might just buy your company for roughly around the same price (or higher) for PARITY. It probably helps to stick around.