Ask HN: Enter market with a well-funded competitor?

2 points by _whm1 10 years ago | 1 comment

Hi HN, i am just looking for a quick unbiased opinion.

Without giving too many details, a few weeks ago a friend of mine had an idea for a SaaS application, targeting a market of small to medium sized companies in a variety of industries.

After some research it turns out there is already a company doing this and they are set up pretty good 300k+ funding, 8 team members, decent sales network and have been around since late 2013. However, we think their product is rather shitty.

We both have a technical background and we are sure we could get a MVP together that is at least on the same quality level as their product within 2-3 months (coding in our free time).

This would be our first entrepreneurial adventure, but i have worked in several startups as a developer before, so i know the mindset and have a pretty good understanding what we need to prioritise.

They have a big headstart but we believe the market is large enough for two or even more competing companies.

So, should we give it a shot? Any advice is appreciated

brudgers 10 years ago |

300k funding for 8 developers is less than a year of runway at $40,000 per year and with no expenses (or income). That's not very much and they're probably a disproportionate amount on SEO/marketing rather than product which is why you heard about them after a little basic research.

The difference is perhaps in their commitment to execution, i.e. it's a company with working code for some definition of "working" as opposed to sitting on the fence worrying about competition. Therein lies the critical question, "Does it matter that there's competition?"

Good luck.