“How to differentiate yourself from the three forms of competition every startup has.”
Master this box and investors see a big market — and you win on the cost of the problem, not a feature war.
Which box is holding you back from reaching $1,000,000?
START HERE
“We don’t really have any competition.”
You say it proudly to an investor — and the room goes cold. “No competition” tells investors your market is small. In truth you always have competition — and naming it the right way is how you win.
→ Name what your buyer is already paying to solve this problem.
DO THE WORK
Ask “What” is my competition, not “Who.”
Every startup faces three forms of competition — the alternatives your buyer is already paying for. Name all three, then compete on the cost of the problem:
You vs. the alternatives: price, reach, visibility and simplicity across all three.
The test: if your solution costs less than the problem does, you win.
Doing nothing is NOT your competition. If a prospect isn’t already spending time, money, effort, energy or resources on this problem, there’s nothing to displace. Until a trigger event makes it urgent, move on — and spend your time with buyers who are already paying to solve the problem you solve.
The #1 thing investors care about is market size. Southwest didn’t compete with airlines — they competed with trains, cars and buses, reframing the category. Julie Angus won two $100K pitch competitions in two days by comparing her ocean drone not to other drones but to the $18,000/day research ships solving the same problem.
“Ask ‘What’ is my competition — not ‘Who’ are my competitors.”
DIRECT
The nearest rival selling the same thing you do. Strategy: Avoid.
MOST COMMONLY USED
The everyday alternative most people default to — often a spreadsheet or manual workaround. Strategy: Be different, not better.
MOST EXPENSIVE
The premium, highest-priced option in the category. Strategy: Be cheaper.
You vs. the alternatives: price, reach, visibility and simplicity across all three.
YOU’RE READY
You can name what the problem costs — and show your solution costs less.
When you compete on the cost of the problem instead of a feature checklist, you’ve mastered Competition. Move on to the Seven Second Sale.
IN THE RESTAURANT EXAMPLE
Restaurant scheduling software, 4 X 4.
Direct = other scheduling apps. Most Commonly Used = Google Sheets plus group texts. Most Expensive = a part-time scheduler at $2,000/month. Against Direct: real-time visibility they don’t offer. Against Sheets and group texts: automatic conflict alerts instead of manual cross-checking. Against the $2,000/month scheduler: $149/month, and it works on a phone on the floor. True across all three: built specifically for restaurants with under 20 staff.
THE THREE BIGGEST MISTAKES
SKIP
You compete on features against rivals — the “who” — instead of pricing against the cost of the problem — the “what” — and end up in a race to the bottom.
SHORTCUT
You claim you “have no competition,” which blinds you to the alternatives your buyer is already paying for.
STUMBLE
You name the three forms but never build the comparison grid — so you can’t actually show a prospect why you cost less across all three.