I sometimes meet with entrepreneurs who tell me they have no competition and are the only ones doing their idea. While that may be true (but unlikely), in my experience no competition is usually not a good thing. Here are a couple of reasons why that statement would raise a yellow flag.

Founder naivety

As I have written before, no ideas are unique. Someone, somewhere else in the world likely has the same idea and it is all about execution. So when I hear a founder say they have no competition, I worry they are not doing enough customer discovery to get out and talk to customers. If the customer is not already trying to solve the problem I would worry it is not a must-have. If the customer is already doing something to solve their problem, that is the basis of competition (could be internal, non-tech, software). Instead, I much prefer a founder to explain the current competitive landscape (shows understanding of the problem and market) and why they have a unique insight into the market (shows focus and vision).

Validating a real problem

When we start companies in our Studio, we view it as a positive when we find other competitors trying to tackle a similar problem in the same space. That often indicates there are others in the world seeing the same problem as an opportunity. If we find a bunch of smaller/earlier competitors, that is a positive because nobody has cracked the code and a winner(s) has not yet emerged. If we find a legacy competitor that most customers do not like (reviews, ratings, feedback), that is also a positive in that a market opportunity exists to reshape the value proposition for a segment that is no longer being served effectively.

Educating the market for sales

When you are the first to market, you often have to do a double sale. That means first convince the customer they have a problem and need a solution. Second, you have to convince them your solution is the best one. Double sales take longer and move slowly in the early years until the market is ready to buy. With competition in a new market, the competitors are also helping educate the market so you don’t have to always do the double sale. Furthermore, your customer now has a basis of comparison/existing budget that makes their procurement process easier.

There is always competition in some form; make sure you understand how that plays out in the case of your business. And remember, having competition is usually a good thing early on and not something to worry about.