Beyond the Obvious: Why Knowing Your Startup’s True Competitors Is Vital

Sometimes our competitors are not who we think they are

In the mid-80s, electronic typewriters dominated the USA’s typewriter market. These devices that look like dinosaurs now were first introduced in 1978. Gradually, they displaced their electric and mechanical counterparts, even more archaic machines, from the market.

The competition was tough. IBM fought with American rivals, such as Xerox, as well as Japanese and European competitors. However, it wasn’t that competition that made IBM sell its typewriter division in 1991, completely exiting from a market it once dominated.

In June 1977, Apple released Apple II. It was the first launch of a personal computer aimed at a consumer market. The era of PCs began. Apple was first, but not the only. By 1979, over half a million microcomputers were sold. As many companies also offered desktop printers in those years, businesses started throwing away outdated typewriters into the garbage dump.

It’s hard to believe, but in 2019, 14% of companies still used typewriters. But the facts are clear:

  1. Using a typewriter in 2023 may only look like a whim. Or maybe those guys just forgot to buy a new calendar one day.
  1. It was not other, more sophisticated typing devices that replaced typewriters. It was a new category. I bet that typewriters manufacturers didn’t see computers as a threat for some time (even though IBM sold mainframe computers).

So, sometimes competition comes as if out of nowhere.

That begs the question: do you know who your startup’s competitors are?

Who will steal your customers?

Jeff Bezos often said we shouldn’t focus too much on our competitors. It’s much better, he insisted, to be “customer obsessed.”

I do agree with him. A company makes a profit by satisfying customer needs, not by outpacing its contenders. But it can’t ignore its competitors completely.

But who are they?

If your company sells Toyota, then Mazda, Volkswagen, Ford, or Kia, dealers seem to be your rivals. But if you’re an Italian restaurant manager, you may find out that a bowling club also competes with you because:

  • People can eat there
  • People can have fun there

Moreover, some marketers would say that a cinema theatre may also be considered your adversary. For example, if a person has three hours to rest on a Friday, and if they go to a cinema, they are unlikely to show up on the threshold of your restaurant that night.

Let’s get back to the car sellers for the moment. While some dealerships fight with each other for every consumer, the latter may drift in another direction. Some of my friends don’t hurry to trade their old cars because they rarely use them. Instead, they prefer Uber for short trips around the city. Is Uber a contender for a car dealership?

The signs that a business is your competitor

Your startup’s competitors are any other businesses that:

  • Satisfy the same customer needs
  • Fight with your company for the same scarce customers’ resources

For instance, when it comes to leisure, the scarcest resource is time. People usually don’t have a lot of spare hours. It means that on a Friday night, people can’t go to a restaurant, play chess, watch a movie, read a book, or sit with friends in a bar. They have to choose.

So, if they need to have fun, any company offering this opportunity may be your contender.

When a person buys a car, money looks like an obvious scarce resource. This is because only a few people can afford several cars. But money is not the only such resource.

When people prefer to take a taxi, they don’t base their decision only on money. They may want to avoid parking problems. They may want to sleep or work in a taxi. So, other scarce resources are time and energy.

Or imagine a person choosing between hiring a freelancer to create pictures for their website or paying for AI-based software that can do the same. If the prices are comparable, they will choose based on their perception of how much time they will spend on task management.


Knowing your true competitors is important not only because it may help you see the threats from their side before they steal your customers. It will also help you look at your customers and their needs from a new perspective and devise a more resilient and successful strategy for your startup.

Business isn’t a fight with your competitors. Business is a battle for the hearts and minds of your customers. But knowing your competitors, including those who can flank you, is essential.

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Author – Svyatoslav Biryulin