A founder of a new software startup recently forwarded me a press release from his competitor. He wanted my take on how I thought it would impact his business and what advantages it would provide for the competitor.
The release announced that the competing company had raised capital from a venture capital firm. While it did not give specifics, such as the amount invested, it gave the impression that this was going to be a big boost to the company, allow them to build all sorts of new products, and grow significantly.
When I saw the email I was about to head out to our family farm for a few days, but I wanted to provide a quick response—I know how these types of press releases can shake a founder.
I thought the topic might be of use to others, so I wanted to share my response here on my blog. It’s unedited, so please forgive the grammar.
Welcome to the next stage of growing a company! The competitor press release.
These are never fun to see. I always got a sick feeling in my stomach when I saw them. But in hindsight they never slowed my company down or really had any impact. Occasionally they would reveal to me an area of opportunity that I had not thought about and so I would investigate. Such as a new product feature or perhaps a market segment.
Your market is sufficient for 10 companies to all have success. Don’t get obsessed with any one company. It will drain your best efforts.
Use this as a mirror to once again ask yourself what product you are building, how do you want to build your company, what lifestyle do you want, and do you want investors and if so who, how, when, why, etc.
As for this release, my guess is they put in some money for growth and now have two or more board seats. They may build more product or try and acquire with it. Generally they waste it on too much sales capacity and it gets sloppy. But they will grow faster and gather more share. That does not mean it will harm your ability to grow along the same path you have mapped out.
I tried to listen to myself and see if something like this made me more alert, which was good. Or if it caused fear, which is harmful. There is a thin line there. Fear can cause you to make poor decisions. Alertness can awaken you to opportunity.
Last thought, when investors put money into competitors, the main point to take away is that your market is a valid one. See it as a big sign of future success in your market. You are on the right path.
If you want to take on investment, this press release will actually make that easier, not harder. If you do not, then you can just smile and know there is value ahead. Focus on your segment and your product. Take care of your customers. Do that for a few years and you will be very successful.
Thanks for the comments on the podcast. I am having fun with it. I have a great one coming next week, I think you will enjoy it.
All the best,
When I returned from our weekend on the farm I was greeted by a reply from this founder. He said my comments sparked a deep discussion with his co-founder and they became motivated in a fresh new way. It’s always interesting to me how something such as a competitor’s press release, which on the surface can seem threatening, when we pause and reconnect with our original vision and inner drive can actually be fuel for a new phase of healthy growth.
If something is pressing against you with the potential to create fear, take it out for a walk. Listen to what it is teaching you about what you are working on. Use it as a mirror to ask yourself what you really want to accomplish. Then get back after it in a big new way.