Startups have lots of worries on a daily basis. Big worries that immediately to mind are (a) running out of money, (b) building the correct product and (c) hiring the right people. Another big, macro worry is how to think about competition, particularly how much to worry about getting your product launched before anyone else.
The speed of your product launch affects many things, but two in-particular:
- Cash. Moving quickly typically burns more capital.
- Product quality. Moving quickly typically affects product quality.
In some instances, spending more money and reducing product quality are the right things to do, but often it’s not because, over time, the best product in the market will win-out over the first product in the market.
One of the best examples of this lesson, that I’ve run across, is in this podcast (at minute 31:28). The founder of (the very popular) Behance discusses his unique playbook. Once you have this, decisions become easier and you worry less about competitive pressures like speed-to-market.
A great local Atlanta example of this topic is how Pat Pow-anpongkul is thinking about his startup Real Meal Delivery. Pat was a power-user of other food delivery startups when he lived in San Francisco. These early startups in this space were heavily subsidized by some of the best VCs in the country. All that money proved to Pat that consumers loved the offering; a strong consumer brand could be created in this space, but no one has proven that this type of business can be profitable.With these learnings in mind, Pat moved to Atlanta to launch a best-to-market food delivery company (versus a first-to-market one). As Pat says, “food companies can’t be treated like technology companies. You can’t spend aggressively on marketing because the gross margin is so low. You can’t hire super expensive engineering talent. The Real Meal Delivery team is going to lean into creating a food delivery startup where the economics actually work.”
This is a great lesson for Atlanta-based founders. Since many of our startups aren’t heavily subsidized in the earliest stages by venture capital, we have the burden of being “best” instead of “first” many times. While this situation is often frustrating to local founders, this early focus on sustainability is usually healthier in the long term. These heavily funded startups typically only have one shot at becoming an unicorn, whereas Atlanta startups often have more time to try more things.
As Pat says, “Atlanta is the perfect place for us to focus all of our attention on making this business model work.”As a side note, the Traction podcast by NextView Ventures is a fairly new podcast, but it’s quickly become one of my favorites, because they chose to focus on the very early, scrappy things that founders do to get their earliest traction. These types of things are rarely discussed in the big tech media, but these lessons are some of the most valuable to other founders.
Lastly, since this post is about competition, here are a few more blog posts about that topic. The very first time that I heard about a viable competitor in my startup career, I was so scared that my ears started ringing. Over a decade later, my experiences have taught me to ignore competition and simply build a product that customers love.
David Payne is a serial entrepreneur and co-founder of Switchyards, a consumer-focused startup hub in downtown Atlanta. You can read more about his startup journey here. Follow him on his blog and Twitter.
[image credit: First and second provided by Payne via Real Meal Delivery. Last via Cushman Wakefield.]