A slide on the competition is the chance to shine as a founder
"We have no competitors," say some founders. Or they may downplay the huge threat that is their competition, assuming that talking about competition will ruin the magic spell they are trying to cast on investors. But talking about competition won't ruin the magic you're trying to cast. After all, no one thinks they're starting a company in a vacuum.
There is no startup without competitors, but you need to know how to talk about them, including how you plan to exist alongside the competition. Until I wipe them off the face of the planet with your brilliance, of course.
There is no “no competition” scenario
Even if you are the first company to do something in a particular market and there is literally no competition yet, you have to remember that you are still trying to build something that potential customers are willing to pay money for. To do that, you have to find a "problem" to solve and customers, be they businesses, government entities, or individuals, who need a solution.
In the context of a competitive slide, if there are no companies building solutions, or if there are no products already solving this, there will be competing workarounds. If the first electric vacuum was shipping, for example, the competition might have included hand vacs (no, really!) or the humble broom.
Remember that the competitive alternative may not be obvious. For movies, a competitive alternative might be Netflix, but that's only true if you limit the competitive field to "ways of watching movies." That's not true at all; theaters are dating destinations and entertainment “fixes,” and the competitors might be a bowling alley, a ride in a national park, a live concert, or staying at home listening to music with friends.
If it can't be found in any competitive alternative, you may have a pretty serious problem on your hands. If people aren't willing to pay to solve a problem now, why would they in the future?
How to talk about your competitors
Assuming you have a pretty clear picture of who your competitors are, now it's time to figure out how to talk about them in detail.
If you have a lot of competitors, a good easy way to explain how you fit into the competitive landscape is with a two-axis chart and position your company relative to them:
A real example is the competition slide for BoxedUp. Many (most?) startups present their competitors in this way way, and it works, although it is quite simplistic. To make this more robust, you can more clearly identify how you differ from established competitors, for example.
A better way to introduce your competition is to identify the ways in which you are similar to and different from other major players in the market. If it's identical in every way, you're going to have to put in a lot of effort. And if you're positioning yourself to beat the competition just by being cheaper, you're effectively positioning yourself in a free-falling price war from the start, and it's often difficult. raise money for businesses whose only differentiator is “we are cheaper. You better believe that your competitors will take a loss for a while if necessary to put you out of business.
For its Serie B of $15 million, Minut presented its competitive landscape in this way. Their competition slide does a great job of showing how the company differs from its competitors. It's the cheapest option, yes, but it also adds a whole host of additional features and use cases.
Lunchbox took another approach:
Lunchbox raised $50 million and used this slide to compare it to its main competitor, Toast. Lunchbox showed that it's like Toast, but for multi-unit restaurants. It also differentiates itself on this slide from all the SMB offerings, essentially answering questions investors might have about where Lunchbox fits in with the other, arguably better-known brands.
Not strictly part of the competitive landscape, but by pulling key data from Toast's filing (the S-1 portion), the company is helping investors think big and shows that there is an opportunity in the market for big returns in a market almost adjacent to the main one.
all together
The competition slide is your chance to shine as a founder. Think about your competitors both vertically (who are your direct competitors at the moment) and more horizontally (which companies are in adjacent markets and might be attempting market extension in your field). You can also think about competing alternatives and other ways to solve the problem.
For example, there is a market for a home dry cleaning robot. Presso recently raised $8 million. The competitive alternative, however, is to put clothes in the washer you already have, use a service like Rinse (which picks up your dry cleaners and drops them at your house, which raised $14 million a few years ago), or go to the dry cleaning yourself.
Ultimately, the trick is to put yourself in the shoes of your prospects and take the broadest, most creative view of how they might solve a particular problem. That's your competitive landscape and your chance to show how your solution is the best. You get additional bonus points if your differentiators also play into your go-to-market strategy; In the case of Minut, for example, the people who benefit the most from their products are Airbnb hosts. get that Airbnb endorsing the product was a stroke of genius, and it doesn't hurt fundraising in the slightest.
