Startups Die of Suicide, Not Murder

It’s a great saying in Silicon Valley. “Startups Die of Suicide, Not Murder.” I tell this to my startup founders who pay too much attention to what competitors are doing. Most startups i’ve seen end up dying due to their own bad decisions or actions (or inaction), not from something a competitor did.

Don’t get me wrong, you should be aware of what competitors are doing as you differentiate by counter-positioning against them. But i would argue you are better off spending your time disproportionately on what your customers are doing or saying. Then you build your business around serving them versus following what your competition is doing.

I also think that most markets end up being so much bigger than people think. This is because of how fast technology is infiltrating every single aspect of life. In a massive growing market, there will be 3–4 dominant companies in this sector. There are very few “winner take all” markets these days. I believe Zero-Sum competitions do exist but mainly in the old industrial world. Technology in theory is more about abundance. It is also just healthier to think this way in life anyways.

I will use an example from big Company land as per an interview with Simon Sinek and his experience consulting at both Microsoft during the Ballmer years vs. Apple under Steve Jobs. Microsoft focused on the competition while Apple focused on where they were going & the long game. You could even argue that this attitude is one big reason that Zune lost badly versus the Apple iPod despite being a slightly better made product. Definitely helped that Apple lined up an ecosystem of music labels around them and became a better value proposition to customers versus the limited song catalogue at MSFT Zune.

During my time at 500 Startups, I would always get pinged or pulled aside by anxious portfolio company founders freaking out over a competitor, launching a new product, or raising a lot of money from some top tier investor. I’d just tell them to relax and focus on talking with customers and focusing on the team and building the product. Actually in the majority of the cases, the competitors actions were easily neutralized or ended up going nowhere.

My main point here is that obsessing about competitors is almost always a waste of time and energy. And frankly, is a losing proposition in life generally. Focus on what you have control over: Yourself, your team, and the actions you are taking for the customers in the business you are building.

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