Something that comes up a lot during my conversations with founders is – Competition – with a capital C.

Often times, they steer clear of really interesting projects because they feel there is too much competition in that market. It’s a common cognitive bias because that’s how we’re taught to think about competition in the “normal” business world.

However, in my not so humble opinion, if you are a building a self-funded SaaS app as a side proejct, competition is irrelevant and should be ignored 99% of the time. Here are six reasons to support that assertion:


Reason #1: If you build up a rapport with your customers by building what they want, and serving them well, you will get a solid customer base. Jessica Livingston, co-founder of Y Combinator, points out – building something people want is the single most important factor for success.


Reason #2: People don’t think the same. That which your competitor considers to be an effective UI will annoy the hell out of a percentage of their customers. Every day those folks will login and think “damn, I wish they didn’t do it this way”. Then, one day, those people will find out about your app and be overjoyed.


Reason #3: It helps to be in a market with competition. It means potential customers are already educated about the type of tool you’re building. So now, rather than spend time educating people, you can spend time finding clever marketing angles and differentiators to siphon people from the competition to your product.


Reason #4: There are many, many, examples of companies moving into saturated markets and killing it.

Social networking was old news by the time Facebook started gaining Traction.

Google was preceded by over 20 competitors.

Slack was soooo late to the party. There was Hipchat, Campfire, Skype and a host of other services.

How about Gabriel Weinberg and DuckDuckGo? One guy going head to head with Google. One guy and a few linux servers up against a market saturating behemoth… and now DDG is one of the default choices as an iPhone search engine and getting over ten million queries a day.

Rob Walling’s Drip. Who in their right mind would enter a saturated market owned by Constant Contact, Mailchimp etc.? But it worked out. He even exited for undisclosed millions.


Reason #5: With true differentiation you can carve your own segment out of any market.

A good analogy to use is Photoshop layers. In this analogy the market is a single picture in Photoshop, built out of multiple layers.

The trick is to make sure you are not on the same layer as anyone else. In many ways this type of segmentation is like having no competition at all.

Consider Drip, it sits within the competitive eco system of email-as-a-service providers, but is still exists on a different layer than any other service in that market, no wonder Rob cleaned up!


Reason #6: If you give a shit you can overcome almost any obstacle.

We KNOW with dogged determination you will get customers. We KNOW you will build a unique and competitive offering because you will be in constant communication with your customers. We know once you start talking to real customers and making them happy you will be energized.

What we don’t know is… Will you stick at this and get past the 3 year dip it takes to build any business? A feat that is way easier if you give a shit about what you’re doing.

. . .

I’m building Nugget, a startup incubator & community, that focuses on helping software developers launch sucessfull side projects.