There are A LOT of things never to say to a person — let alone an investor, but there is a not-so-obvious one that you should never say out loud.
“We have no competition.”
Your idea is excellent. Nobody else is doing it. You’ve got no competition. It’s sure to be a hit, right?
Doubtful.
You may believe that having no competition is an advantage in an investor’s eye. What you don’t know is, when you say these words, investors tend to hear a few different things:
1. You didn’t do your homework
It can mean that either you don’t know how to asses the market or you single-handedly neglected to do your market research. Anything you say next will also sound un-researched and sloppy & again who wants to fund a lazy entrepreneur?
2. There is no demand for your product or service
Competition means demand. And if there is no competition, there is no demand. When there is no demand, there is no future for your company.
If you’ve done your research & still think you have no competition, ask this question: “Why isn’t anybody else doing it?”. Chances are the answer will be that it is not as cost-efficient or as effective.
Remember that competition is basically a validation for your product, and it should be celebrated rather than dreaded.
3. You think competitors should be an exact match
You don’t know the difference between perfect vs imperfect competition. Remember there is always a competition. Even when it seems like there is nothing like your product out there, think about what currently exists on the market that your product would displace.
So, having a competitor turns out to be a good thing.
Next time you’re meeting with an investors try to say “We have competition, but here is why our’s is better” instead or better yet reach us at hey@helo.land & we’ll help you with your next pitch meeting.
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