Founder perspectives on building in competitive markets

Starting any business is hard, but entering a competitive industry requires a different strategy than a less saturated space. Whether you think your competitors are addressing a problem incorrectly or there’s a gap in meeting customer needs, you still have to set your product apart. Your narrative must challenge the status quo offered by your competitors and convince customers that you’re offering something better.

We recently hosted a roundtable with several founders to get their takes on operating in a competitive industry. They shared their insights around breaking the mold, learning from competitor mistakes, and identifying the paths they want their businesses to take. 

The Founders:

• Chat Joglekar, co-founder and CEO of Baton
• Christine Devane, co-founder of Brightfin
• Phoebe Thompson, founder of Extra Cred 

Companies like Airbnb and Uber may have started as alternatives in existing industries, but they have become industry disruptors. Did the founders start out with that vision, or were these the results of a consumer base hungry for something different?

As you consider your own business, you should ask yourself: Are you trying to solve a narrow customer pain point, or are you trying to change an industry-wide dynamic? Even if your company doesn’t reflect your answer today, you should still identify your overall vision for your product as you penetrate a competitive industry.

Baton helps people buy and sell businesses, recognizing that the parties involved need guidance. “For many folks in the market, it’s the first and only time they’ll sell their small business. And for many of the buyers, it’s their first time buying,” says Chat Joglekar. “Longer-term, at scale, we think we’ll have the ability to transform the market.”

Christine Devane, co-founder of the spending app Brightfin, says that the company isn’t trying to transform the industry, but rather that it serves people who are in search of helpful guidance with respect to their financial planning. “We’re here to give them better answers than what they have today,” Devane says. “We definitely plan to expand our product offering. What’s next for us is taking the ICP we have today and bringing them more solutions. Then we can talk about expanding the profile.”

Extra Cred is an influencer marketing agency for startups, founded because Phoebe Thompson realized that many startups — specifically fintechs — could combat bad financial advice that many people consume. “I don’t think I want to change the industry, but I definitely want to make sure that people are getting good financial advice when it’s sponsored by companies I work with,” she says.

Knowing your overall vision will impact the decisions you make in your business. Expanding your product offerings or ICP allows for gradual expansion, whether you want to expand your presence or disrupt the industry.

Do you view your competitors as friends or opponents?

Perhaps it’s a little bit of both. You might be targeting the same customers, but have different offerings. Whether your products are complementary or true alternatives, you’re likely keeping an eye on what your competitors are doing, from new features launched to marketing strategy.

If your competitors are larger companies with more resources, you have an opportunity to learn from their approaches (and mistakes). Joglekar says that a competitor’s approach to a problem enables Baton to think from a first-principles mindset. “Is there something that we didn’t take into account?” he wonders. “Or are we missing something?” 

But overall, Baton builds relationships with competitors. Many that pivot are startups that end up not being needed in the space where they’re operating. “It’s helpful to build those relationships because then we learn from their journey,” Joglekar says. “I really appreciate that folks are in the arena trying to solve a problem.”

At the opposite end of the spectrum, identifying what works well for competitors raises its own questions. Do you rely on the same strategy, or do you find an original solution? The same strategy could bode well for your product, but also prevent you from differentiating yourself. 

For Joglekar, it’s understanding “the ethos of what resonated.” If you know what works well — and why — you can put your own spin on it to reach the right customers. 

Observing your competitors can also provide you with valuable insights, such as their company operations or pricing strategies. Thompson thinks pricing, in particular, is critical information to set the right expectations.

“Women, especially in the early stages of their careers, tend to undercharge and undervalue themselves,” she says. “Seeing what other founders are doing sometimes blows me away, but that’s really important for me.” 

While data may not come naturally to you as a founder, the more you collect, the more you can root your decisions in industry information. You can also seek out individuals who are more skilled with data and numbers when it comes to measurement and growth. 

When you’re entering a competitive industry, you have to challenge the existing assumptions of your competitors. At the same time, you can learn by understanding what works and what doesn’t. Knowing how to apply what you learn will make a huge difference in your ability to break through in a crowded market. 

Whether you’re talking to investors, business colleagues, or friends and family, you’ve undoubtedly been met with some skepticism. Operating in a competitive industry can appear like an uphill battle. You’re relying on your conviction that you’re providing a solution to a real and unsolved problem.

Entering the arena at all is the first big decision, but then you’ll face countless others as you navigate your competition. Among the founders we spoke with, this included decisions as:

• Recurring versus one-time revenue (Baton)
• Not selling ads (Brightfin)
• Not working with big celebrities (Extra Cred)

Each founder was very clear about the business decisions they had made and why it was in the best interests of their product. The common theme was establishing trust with customers. 

Brightfin understands the importance of customer trust amid an overwhelming amount of financial information online — most of which doesn’t provide consumers with the solution they need. “People sort of assume that because this is a crowded space, no product will ever work,” says Devane. “I think that’s not true. The problem is real. People need it. And if you can make a product that’s good enough, they will be willing to pay for it.”

Prioritizing customer trust is closely intertwined with pursuing solutions you care about. This aspect of your founder DNA will shape many aspects of your business, whether it’s your business model, your hiring decisions, or even your company culture. The desire to solve a problem drove you to enter a competitive market. If you build something you believe in and customers trust you to solve their problem, you’ve positioned yourself to break through the noise.