The Best $50 I've Spent As A Founder
It’s intoxicating to have a new product idea. All of a sudden you begin to envision how it will look and feel and how it will change the lives of millions of people. The speed at which your mind makes calculations to help you imagine the future of your product is nothing short of amazing.
It’s important to remember that your mind is also naturally biased to your knowledge and experiences. This is why your initial product idea will temporarily ignore the practical aspects of what it will take to build a great company. This early stage of operating in a 90% visionary, 10% practical go-to-market mode is normal and obviously these ratios change as you move to test, learn and evolve from your initial hypothesis.
At this early stage there is one thing that first-time founders nearly always do (and get wrong!): They search for competitors.
Sound counter-intuitive? After all, it’s a necessary step to completing a business model canvas and it provides early validation that your idea is sufficiently unique that it has a chance of achieving product/market fit, right?
When a first-time founder starts Googling for competition at this early stage they are likely to:
- Identify wrong competition
- Ignore obvious competition
- Miss previous pioneers
Personal bias plays a significant role when you begin Googling for competition because you base your keywords on a product idea that doesn’t have a clear value proposition. As a result you search based on what comes to mind. This can lead to clicking through pages and pages of search results to companies that may not actually be competition (1). Similarly, the lack of value proposition clarity may cause you to ignore obvious competitors because you convince yourself that your product is somehow different (2).
There is no such thing as an original idea. As discouraging as this statement may appear, it’s one that I’ve subscribed to for some time. Using this as a starting point (even if I’m wrong) reminds me that it’s very likely that someone, somewhere has tried to build the product that’s just come to mind (3). It may be out there for sale right now or it may not. One way or another clues do exist that can plug into your thinking. Searching for competition usually focuses on very recent history and ignores previous pioneers — one of the most powerful inputs to product development.
An outcome which I’ve heard many times before, which is a by-product of identifying wrong competition, ignoring obvious competition or missing previous pioneers is this: “No one is doing what we’re doing.” If you land at this perspective, remember this from Guy Kawasaki:
This is a bummer of a lie because there are only two logical conclusions. First, no one else is doing this because there is no market for it. Second, the entrepreneur is so clueless that he can’t even use Google to figure out he has competition. Suffice it to say that the lack of a market and cluelessness is not conducive to securing an investment. As a rule of thumb, if you have a good idea, five companies are going the same thing. If you have a great idea, fifteen companies are doing the same thing.
The best $50 I’ve spent as a founder (and I’ll do it again!)
Each time I’ve had a new idea whether it be AirShr, Founder Perspective or looked at investing in a venture, I’ve asked a trusted colleague who is disconnected from the idea/venture (and who is a straight shooter) to spend one hour Googling for similar products.
I pay them $50 for their time and they provide me with a summary of links / brief explanations as to why the links are relevant. The value in this approach is three-fold:
- Increased Value Proposition Clarity — You’re forced to articulate (as best as possible) the value proposition of the product idea so the search can take place.
- Decreased Personal Bias — Your personal bias is removed and whilst it may be somewhat replaced by that of the person conducting the search, they won’t have your baggage you do.
- Wider Insight — Following on from the point above, I’ve repeatedly found that asking a trusted, straight-shooting colleague to conduct this type of search has returned rich insight about competitors and previous pioneers which I was probably unlikely to uncover.
I talked about this and other fun topics recently during a Rare Birds ‘Ask Us Anything’ webinar along-side my friends and colleagues Therese Tarlinton and Rhonda Brighton-Hall. You can listen in full here and on behalf of the Rare Birds team, we hope you love it!