Other startup got there before me. Stop or continue?

28 points by uptownben 16 years ago | 72 comments

For the past few months I've been hard at work implementing this great iPhone app idea my wife and I thought of. This morning, while reading through my usual tech news, I found an article about another startup that has already implemented the same idea and has just received significant funding. Needless to say, I was pretty disappointed and frustrated. They created a really great app with all the features I was working on. At this point I think I need to make a decision, either drop this project or push on. They are a 20 person team with a few million in funding and I'm a one man shop without. What's your opinion?

erikstarck 16 years ago |

I wrote a blog post about this a few weeks ago: http://blog.opportunitycloud.com/2009/12/21/stealth-disease-...

Summary: "The cure for the First Mover Paranoia is to not view competitors as impassable roadblocks but as a verification that the idea actually works and has a market. That is in fact great news! Now the challenge becomes to find holes in the existing market (geographic, pricing, quality etc.) or to improve on what the competitor is doing."

mschy 16 years ago | |

Agreed.

Find a portion of the target market that is unserved, or poorly served by their app, and differentiate your app to appeal to them. If this means making it narrower, good.

The only sort of competition I'd strongly discourage is straight-up head to head competition. You have to differentiate yourself somehow, even if not on a technical dimension.

brk 16 years ago |

Keep going.

Although, if your disposition is such that you get discouraged from a press release, you should stop and assess if you really have the personality and disposition for such a marketplace. Rarely ever do you see a successful marketplace with only enough room for a single product/solution.

There is no free lunch, and an "overnight success" takes an average of 3 years to build. Along way will be many roadblocks, distractions and false alarms.

Good luck.

gommm 16 years ago | |

And anyway, in the worse case if after launching the app it doesn't become successful, you can always leverage it to get well paid consulting developing iphone apps.

And consulting gigs are a great way to keep afloat while developing your next products :-)

z8000 16 years ago | | |

Indeed! I made one iPhone app last year, gave it away for free, got a lot of exposure, and have been doing enough consulting to (finally) leave my day job @ Y! and focus on my own big (iPhone related) project.

DJN 16 years ago |

It is easy to say "just go for it". In reality, it is quite risky.

Theoretically, it is possible to unseat a competitor like Google in search, or Facebook in social networking, but you really have to know what you are doing.

In your case, a better approach is to do some customer development first. Speak to potential users of your product. Find out if they are dissatisfied with your competitor's offering. What will it take to switch.

After that exercise, you should be in a better position to make an informed decision.

mrshoe 16 years ago | |

What will it take to switch.

Why does he need anyone to switch? This competitor has just launched their product. That means they have very few users and almost no brand recognition. 99.9% of the world will have no idea who launched first and won't care.

You don't need to convince anyone to switch from your competitor's product. You just need to convince people to use your product, which is a problem you already had. In that sense, the launch of a competing product shouldn't affect your roadmap at all.

Longer term, you should be worried about the huge imbalance in resources. That's solvable, though: if you get any traction with your product you can raise funds and hire a team.

maxklein 16 years ago |

Nobody should work for months on an iPhone app. The platform is not friendly to that style of app. Work for weeks, launch and test.

RyanMcGreal 16 years ago | |

> Work for weeks, launch and test.

I don't know how friendly the platform is for that approach, either. Fast iteration works better when you don't have the bottleneck of app store reviewers.

maxklein 16 years ago | | |

App store review at the moment takes about 3 days. And even when it took 2 weeks, this is not a big problem. Iterating faster than two weeks would be annoying to your users - imaging have to constantly sync a new app every second day, and new bugs being introduced and so on. The two week review period is good for users.

CamperBob 16 years ago | |

Counterpoint: an iPhone has about the same computing power as the first-gen Xbox. People will eventually put a commensurate amount of development effort into it, and you will have to compete with them.

maxklein 16 years ago | | |

Yes, but if you had been releasign quickly, by now you know your consumers, you have a mailing list, you know what they want, and you can add your snazzy graphics for an existent userbase. Work for months AFTER you have tested your concept and people like what they see.

Because if you spend months and release to the great app store silence, it will break you faster than a 5 ton pin would break a camels back.

mattmaroon 16 years ago | | |

The problem isn't the iPhone's specs, it's the distribution network.

visakhcr 16 years ago | |

Agreed.

On the lighter side, there is a chance that Apple might release some other gadget and people will go after it if you are going to take months to release an app for iphone ;)

csuper 16 years ago |

Keep pushing on. You should be encouraged that the idea has competition, I think that gives it merit.

Also - their large team and funding could actually limit them. You will have a lot more freedom to build what you want.

ams6110 16 years ago | |

They are also now beholden to their fund sources... that kind of money does not come without strings.

mpf62 16 years ago | |

I fully agree.

And they need to make a good amount of money to "feed" 20 people after they exhausted the funding. Think of it this way: you need at least 95% less sales to make the same profit per person (implied you sold your app for the same price).

Tawheed 16 years ago |

Its not the idea of the product that counts, its what your vision is for how you want to solve the problem in your own unique way. If you're tapping into a real market, there will be tons of products that promise to solve the problem; you have to believe that your way is the best way to solve the problem.

If you don't believe the above, then don't bother. Go get a normal 9-5 job.

aaronblohowiak 16 years ago | |

It's not the product. It's not the marketing. It's not the tech. It's not the market. Actually, it could be any of these things.. the key is to know what your competitive advantage is and run with it.

mschy 16 years ago | |

you have to believe that your way is the best way to solve the problem.

I disagree. You have to believe that your way is Good Enough.

Good Enough plus effective promotion equals sales. Best is a recipe for Duke Nukem Forever.

Tawheed 16 years ago | | |

Sure, if Sales is your only goal. I'm not talking about being a perfectionist, but I'm talking about putting out the best product that you damn well can.

Why aim for mediocre?

uptownben 16 years ago |

Thank you for the great comments everyone. I spent a few minutes playing with their app. It's already on the app store and it's free (so much for undercutting). While they've created a great app, I have a few ideas that may give my version a good shot. I'm going to sit down and have a think, put some more ideas together. Thanks again for the great input.

cedsav 16 years ago |

It's not a zero-sum game. If they do well, it doesn't mean at all that you're going to fail.

With a large team and large funding, your competitor has set for itself a very high bar for success.

You, on the other hand, can declare victory by building something (some) people want (TM), even if it's not making you a lot of money (assuming you have other source of income).

slapshot 16 years ago |

Amazon was not the first bookstore.

Google was not the first search engine.

Did they give up?

iamwil 16 years ago | |

I'm sure there's just as many failed startups that bone-headedly try to keep going.

I think the important thing is to keep evaluating based on user reactions and market size. You might find that there's a segment of users that want to do something slightly different. Even if you're the first mover, there will always be competition.

That said, I think Amazon knew that eCommerce was going to be a pretty big market, and the Google knew lots of people searched. Even if they didn't get most of the pie, some of the pie was still big enough. If he made an iPhone app to find recipes for star wars fans with allergies (or something with a niche market) without potential for enlarging of the market, it may be time to consider something else.

nurgleboy 16 years ago | |

Was it over when the Germans bombed Pearl Harbour! Well its not over now!!!!

mpf62 16 years ago | | |

Was that before or after the Japanese did the same thing? I nominate you for the Ignorance-Award. I've never read such a stupid/useless Comment on HN before.

NickWritersBloc 16 years ago |

Keep pushing - the first mover has an advantage that depends on their own abilities. I mean, Friendster still dominates, right?

fjabre 16 years ago |

I would say it depends on the type of tech and solution you're dealing with.. If it's an interactive children's book for example then the tech or resources required are minimal and it's more about your unique spin on the product than what's behind it.

If you're talking about creating the next iTunes, something that requires tremendous resources, or bleeding edge tech like Google Wave then you're probably right - you just won't have the resources to compete. Those are the kinds of products that a well funded company will always have a clear and definite advantage in producing.

Somewhere in between the two extremes is a large grey area where with a little bit of luck and determination anything is possible..

I would stay the course unless the financial burden is too great.. It's often the case that when you keep working towards a project goal you find new and interesting ways to tweak your product offering so that it becomes something entirely different and unique in the marketplace..

As long as you think there will be real demand for your product then there is always a chance to spin the marketing in such a way that makes your solution stand out from the rest. Feedback is critical as well.. So don't be shy about asking friends and family.

Your first concern should always be product/market fit not potential competitors.

nfnaaron 16 years ago |

Even if you never get a single user (doubtful), following an idea through to completion is valuable experience. And as noted in other comments, you gain cred.

jeffmould 16 years ago |

I would say keep going. But take a close look at their app. Surely there are differences between yours and theirs, or at least in the ideas you have for yours. Competition can be good and this should not be viewed as a roadblock to developing your app. As Erik points out in his comment, you should look for the differences and how you can fill voids in the market for this app. Does your app appeal to a different demographic, market, is the pricing better, is the overall quality better, etc...? Capitalize on your competition's weaknesses. You obviously have long term plans for your app, whereas your competition may have just thrown it together and have no plans to upgrade or just minimal plans to upgrade. They may be just testing the market with this particular app. Capitalize on their market research and build a better product. Set up Google Alerts for the app name to keep track of what is going on with their product, but DO NOT let yourself get distracted by any chatter at the same time. Use that chatter though to build the better app.

ivenkys 16 years ago |

My 2 cents.

Stop or continue really depends on two things (a) Who is your competitor ? (b) What market are you in ?

From your description your competitor albeit well funded is not established and therefore has exactly the same problem as you - getting customers, this is good. However, if your competitor is someone with deep "links" with Google or Apple or MS or one of the other companies with cash, quit now. Check the background of the founders of the competitor. What sort of track record do they have ? Are they ex-senior members of google, yahoo et all ?

What market you are in matters a lot, is it a market that provides opportunities for specialisation - Continue, are you already in a niche-area of a large market - Stop. Can the market be expanded ? Is there an already existing market with clear pain points or are you building a new one ?

Summary: Weigh your options carefully based on the competitor and the market. All the best.

ulf 16 years ago |

If you decide to continue, use the current developments to your advantage. So your competitor does have significantly more manpower and financial resources? Reduce! Cut some features, really look at their app and identify the core components, checkout user acceptance and then focus on the parts where they do not yet excel.

dennykmiu 16 years ago |

Doing a startup is not unlike taking a long bike ride. You will fall off your bike time and time again, either due to inexperience or obstacles along the path. Now is the time to do an equipment check before you ride again. Don’t try to restart your journey right away unless you are confident that you have the physical endurance and the support of your family (i.e., your wife, as a business partner and as a spouse). Think of your family, your health and your startup as the three legs of your three-legged stool. If you wobble on one but solid on the other two, then at least you have a fighting chance. If you have any doubt on anything, now is the perfect time to walk away and blame it on a broken bike. But keep in mind that as I have learned in my recent climb in Africa, you don't get to the top of Kilimanjaro by stopping, you do so by resting.

uptownben 16 years ago | |

Great advice, thank you!

mattwdelong 16 years ago |

What is the functionality of your app? Get the MAIN functionality finished and release, don't worry about the "other functionality" right now. Release in small iterations, in amounts that a single person can handle. Follow this process and continually release features and improvements based on user suggestions.

It's ultimately up to how you feel with taking a risk, no one can tell you what to do. If you believe in the product, other people believe in it and you feel comfortable then go for it.

More resources on MVP:

http://www.startuplessonslearned.com/search/label/minimum%20... http://venturehacks.com/articles/minimum-viable-product-exam...

cullenking 16 years ago |

Keep going - we (ridewithgps) are up against several players in the same market, two of which have significant funding and 10+ employees. I see those as disadvantages, personally, as our small 3 person group can run circles around most 20 person "bureaucracies" as far as implementation speed, direction changes and business decisions. I don't need to talk to an analyst who is developing requirement documents from some business person; we can go straight to implementation, try something out and see what happens. Of course, a single man shop is hard work once you realize how tricky marketing and UI stuff can be ontop of a solid implementation, but it is far from unheard of.

Or, of course you could give up and wish you would have tried harder when you look back a few years from now. I know which decision I'd regret more!

angelbob 16 years ago |

Do you have a good way to differentiate yourself? You say "all the features I was working on". Do you have a vision for something neat that they haven't done? That would be the factor I'd worry about.

If not -- if they've really done everything you intended to do -- I'd drop it, and take up a different project. If they're not scratching your itch, or not doing it quite right, then there's room in the market, because somebody else probably also has that itch.

To put it another way, would you rather use the product you've been working on (when finished) or the one they just released? If you'd rather use theirs than yours, then they got it right and you're doomed. Quit. If yours would be noticeably better, there's room. Continue.

pschlump 16 years ago |

I built a successful angel funded start-up company. We had 2 other competitors in our "space". One that had $10 million in funding and the other that had $50 million. We had $50,000 at the time. (Yes 50k). We continued. In the end with customers in palace we had raised a couple of million in funding. We sold the company. We were successful. Our competitors couldn't sell the company for enough to even recoup the investment. They folded. They failed. One of them was killed by the VC that funded them. Just because they have 20 people and millions will not make them beat you. You may have the advantage. If you can get to a profitable state you can overcome. Lots of markets can support more than one product in the market. Don't quit.

ortichi 16 years ago |

Continue!!! If your idea/product/service has a market, then it is likely that competition will ensue anyways. Leaders in every field can reap huge profits from an early entrance. the case of now defunct FreeMarkets (aqcuired by its biggest competitor) in the procurement filed is one. Basically, FreeMarkets invented the concept of electronic reverse auction to buy goods and services using an internet based platform, back in 1999! Now, companies all across the globe such as Ivalua [http://www.ivalua.com] have developed this same technology and are selling on pennies to the dollar of what FreeMarkets use to charge 10 years ago. My point is to persevere and try to ride the normal product cycle.

v42134 16 years ago |

Wow! Many comments, much of them valuable; learned a lot, truly. Not that I'm making a summary, but one point is clearly missing...

Decision making is a matter of binary logic, either you go for it, or you don't. From the theory of systems, for that kind of decision you must have one universal "efficiency" criterion, which is, inexorably, money.

(1) Write down all the comments in this thread; number them; (2) Write down all your own thoughts, along the above comments; (3) Assign weight factor to each of the above; bring them to a single dimension (e.g. money); (4) Count -- an you get your decision. (5) If still unsure, go to #2 (perhaps you failed to materialize an idea of yours in a formal way);

imgabe 16 years ago |

Are you working on it full time? If it's just a side project while you work a day job, it doesn't hurt to soldier on a release you app anyway. If you can implement the same features without the overhead of a 20 person team, you could probably undercut their price.

Stasyan 16 years ago |

I say keep going. For sure your app is different enough that there are people who'll prefer your app.

I am in a similar situation. I thought of an idea about a year ago, 4 months ago someone else implemented it. Still going to finish and release...

profquail 16 years ago |

Can you launch before they do? It doesn't matter if they have more people or better funding if you can.

Or, do you think you can execute the idea better than they can? There are plenty of apps on the the app store released by big companies that are garbage...if you can do it better, you'll take away some of their unsatisfied customers.

If you can't do either of those, then I'd either try to find another angle to beat them on, or recognize that I was going to be wasting time if I kept pouring time and money into the project and move on to my next idea.

aaronblohowiak 16 years ago |

You should go to the VCs that usually compete with the VCs that invested in your competitor. This other groups' funding has created a "gap" in the portfolio of other VCs that you could fill. There is the first-mover disadvantage: they have to maintain backwards compatibility and they are now deeply sunk into their UI and marketing. You can learn the lessons they get from feedback. This is like free product testing.

uptownben 16 years ago | |

Didn't think about that. Any idea where I could find that VC information?

sga 16 years ago |

You mention 'They created a really great app with all the features I was working on'. Thinking about your use of the plural of feature, I'm wondering if there is a way to pare down the feature set and provide a lightweight solution (as a differentiator to this competitor)? What is the one (or two features) that provide the real value in the app? Go for those one or two features and make it very simple to use.

minalecs 16 years ago |

keep continuing on. A good example I can think of is foursquare and gowalla. When foursquare was first released they were getting major press and major investors. Not sure how much later gowalla came out, but they are making major moves now, and in my opinion is much better than foursquare. Obviously you will have to come up with some differentiators, but there is plenty of room to compete. good luck.

adityakothadiya 16 years ago |

If the pie is big enough, then you'll have your share. It's unreasonable to expect you to own 100% of your market. So if the market is big, there can be many players. Even the idea/product is same, you can still have your own presence.

Having competition just makes you work even smarter and harder than before. So go for it.

As a matter of fact, I'm in the same boat as yours, and I'm not giving up!

renauldo56 16 years ago |

You are toast against a machine with funding and a 20-person team, unless that team is lead by incompetents or staffed with incompetents.

Sorry. But that's one of the main reasons why getting venture is a good idea: part-timers or self-funders can't possibly bring the same resources.

sdh 16 years ago | |

wow, worst advice ever!

funding is not a guarantee of success. in fact, a funded team has a harder challenge than the non-funded team. as soon as you take funding, the window for liquidity shrinks dramatically. venture investors want their money to grow by 10-20x. if things don't ramp in the way expected, then the investors will walk away and the entrepreneur will be left with a business that can't sustain itself and has to shut down. the more money involved, the less risks that can be taken. chances are very good that this funded team will not exist in 2-3 years.

Murkin 16 years ago |

Can you give a bit more details ?

Does: a) Your app require a large user base to be functional ? b) The appeal increase with larger community ? c) Is useful on its own, regardless of other users ?

There is a reason there are few facebooks and lots of shoe stores. What are you ?

richardburton 16 years ago |

If the app is out there now. Can you tell us which one it is? Perhaps all the people on HN with iPhones can donload it and check it out. I'm not going to say something simplistic like: "Competition is validation" but I'd love to see what your idea was.

twalling 16 years ago |

Keep working on it. If they launch before you, read the comments in the store and see how it's doing, what are its shortcomings, etc. I think this type of thing easily happens all the time. Rarely is there an idea that someone else hasn't thought of.

wensing 16 years ago |

It may be a lost cause, or not. See if they mess up. Regardless, forget features-at-large and focus on the best features, which are:

1. It works. 2. It's easy to use.

You can always one-up in those categories.

mortenjorck 16 years ago | |

Yes and yes. The biggest part that's often overlooked in a product that does something new is how well it does it.

Don't worry about matching them feature for feature because they've got 20 people and you've got 2. Use your size and the fact that you don't have to pass ideas through a meeting to your advantage. Study their product. Find the weaknesses in their UI. Isolate the pain points. Make your product a breeze to use precisely where theirs is kludgy.

Ultimately, people will prefer the better experience to the more feature-rich one. If you can deliver the former, it doesn't matter how long they've been in the market.

aktxyz 16 years ago | |

This is classic case of "talk yourself out of doing something". You got past the hurdle of actually starting, so now finish.

You think gowalla said, oh crap, foursquare beat us to it, we better stop?

If there is not already a clear category winner, then that spot is still completely up for grabs.

trusko 16 years ago |

Difficult to say. If you feel confident that you can do better job and compete with them, keep going. Otherwise don't waste your talent and move on. On the other side, someone already said it - they may mess up.

alexro 16 years ago |

Few months isn't that hard to sacrifice, remember sunk-costs and don't get burnt out.

Edit: the bright side is that you know iPhone inside-out and seeing an opportunity can start on something else pretty fast

keefe 16 years ago |

It depends on how close you are to completion. How much of your codebase can be repurposed to a less populated niche?

herrherr 16 years ago |

If there is no competition, there is no market. So go for it.

riot 16 years ago |

I've had a similar experience - it was pretty discouraging the first time but I soon realized I should still go for it and trust I could come up with a better solution.

jacopogio 16 years ago |

stop your project but try to build on that concept and improve it. And let them know

ramanujan 16 years ago |

Be pragmatic and join them.

tjoozeylabs 16 years ago |

post link to other startup

tjoozeylabs 16 years ago | |

also try marketing techniques along with the release of your app

hockeybias 16 years ago |

Push on! ...Keep an eye on the other startup and modify your app. Differentiate your app to leverage their weaknesses and your strengths!