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Please imagine this scenario for a moment:

  • You've got a great idea for a software product, and research indicates you've got basically no competition because your product has unique features that make it highly desirable. You are hyped; you begin coding and begin registering a business to sell the software. You'll release v1.0 in eight weeks.
  • One week into the project, you're on the verge of racking up necessary costs, and you see an announcement that a new competitor has just released basically a clone of your killer product.

What do you do now?

My first reaction would be a bad word, quickly followed by thinking about what competitive edge we still have that will allow us a good chance in a stand-off. What else?

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KEEP GOING. You have no idea how well their product will be received, or how committed they will be to it. And a year down the road, their 8 week head start likely won't matter. – Scott Wilson May 14 '12 at 10:21
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Make your product better. Hope the new competitor spends great piles of cash building the market for you so you can fill it with a better product. – Jim Blizard May 14 '12 at 13:01
Can you tell us what it is now that it's already out there now? – David May 18 '12 at 6:10
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@David: I can, but I want to keep this question generic because I think it has universal value. Let's not dive into specifics. However, I've taken a good look at the competition since posting this question, and we're going to blow them out of the water - we just need to launch. – Torben Gundtofte-Bruun May 18 '12 at 7:12
@TorbenGundtofte-Bruun I don't mean specifically for this question. You need to get your product out there and be getting feedback. Don't hold off while you build this amazing product, launch the earliest iteration you can. Remember the other guys will sweat when you launch, in exactly the same way you did when you first saw theirs. Your idea may well be better (you think, the outside world needs to be the judge of that), but they are released, you are not, while that's the case, it doesn't matter how much better yours is. – David May 18 '12 at 7:59
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6 Answers

up vote 8 down vote accepted

In most markets, first to market is way less important than execution. There have been so many examples that get thrown around with Facebook probably being the most significant (myspace, friendster were there first).

It really validates that you are onto something. Unless your market is really small, sharing it with someone is ok. It might even be to your advantage if your product is innovative, as their product will help to show people that they need something like this... then they can choose which product they like best.

I would keep pushing forward making your product great and don't let this slow you down from launching. What they have over you right now is that they have launched... that's something that you can even the stakes on in just 8 weeks.

I think the real risk is you trying to add a whole bunch more stuff to your app to compete with them and delaying launching. In most cases, you really don't know what else your app needs to do until you start hearing from customers, until then you are guessing.

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Wise words. We have no plans to beef up our product in version 1. We also won't slim it down to launch earlier - we're going with our original plan. – Torben Gundtofte-Bruun May 18 '12 at 7:13
up vote 6 down vote

Do you know the difference between an invention and an innovation?

An invention is totally new. No one knows what it is and people who invent things have a hard time explaining what they are and what benefit there is to using them.

An innovation takes an existing product or service and makes it work in a waaaay different manner. There were smartphones before the iPhone, there were social networks before Facebook, there were pic sharing sites before Instagram, there were search engines before Google, there were QA sites before Stack... An innovation takes a car with square wheels and turns it into a car with round wheels.

So when I hear wanabee entrepreneurs say "oh too bad it already exists, we can't do it, got to think of a new idea", it's generally not a good sign.

Don't worry about the other app. Make sure yours is the one with the round wheels.

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Great way to put it! Mine's definitely got the round'uns. – Torben Gundtofte-Bruun May 14 '12 at 19:10
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ok, very cool! There are plenty of people who build cars with square wheels; if you know how to spot squared-wheel cars, you can build great businesses. BTW, the best builders of squared-wheel cars usually build B2B software. – frenchie May 14 '12 at 20:52
up vote 3 down vote

Great - that validates your idea. Horrible ideas don't usually survive to get launched. Good ideas do.

Now, learn your competitor, and launch your own company with a slightly better offering.

Remember:

  • Facebook wasn't the first IM.
  • Google wasn't the first search engine
  • Apple did not invent the MP3 player
  • Skype did not invent VOIP or the instant messenger (both pioneered by Israeli companies btw: Vocaltec and ICQ respectively)

they just did a better job that what had existed before.

So can you.

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to drive your point even further , I remember using command line based instant messaging on a Solaris waaaay before ICQ so 1) no, they did not pioneer it, 2) they were wildly successful thus proving your point. – maciej May 14 '12 at 21:30
just out of curiosity, on that solaris IM: how did you see your contact list and their status? how were you notified as someone came online, went offline? – ron M. May 15 '12 at 3:41
up vote 1 down vote

I myself would be psyched because:

  1. It means that the idea that I had actually makes sense and I am not too early or late with the idea (market validation).

  2. I now have a competitor to compare and compete against.

I really feel that inventing a new market (with a new product) is extremely difficult and companies successful in doing this are the exceptions rather than the norm. So I'll be a little more at ease when I see a similar idea being implemented and also the competitor in me will be stirred to put out a better product.

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up vote 0 down vote

Ever heard of the Power of Ten?

At the same moment you come up with a great idea, nine others have came up with it right then too. The trick is to not get caught up in the race and lose site of your product value. The value in any product is based on the needs of the clients. Assumptions are are easy to come by. Knowledge is not. If you have a true understanding of what your clients needs are, your product will succeed. If you have the philosophy that in order to succeed, you have to be the first product out, you will run the risk of making assumptions to try and stay on top. Where coming up from behind, not only will you have the benefit gained from the knowledge of your clients needs, you will also reap the rewards from knowledge of your competitors downfalls. Its not the idea, nor the programmer that makes a piece of software great. It is the inside knowledge of the users needs combined with the ability to fill those needs that makes the software great.

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up vote 0 down vote

You can be a very successful Fast follower startup

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