Competition: Don't Say there Isn't Any

There is always competition. (You'll lose credibility if you say there isn't any.) Somehow, people get along today without your product or service. So at the very least, the "status quo" is the competition.

So what is the status quo?

Assume Others are Targeting this Opportunity Today

You could assume that you're the only person on the planet that's smart enough to address this opportunity, or that's smart enough to address this opportunity in the way that you are targeting it. That's usually not a safe assumption.  Only the paranoid survive in high-tech.

Future Competition

Who do you expect will be competition, once this market niche you're addressing is shown to be a viable niche? In other words, what bigger, established companies will enter this market? (This is not all bad news. Those larger companies who are likely to enter your market once it's shown to be viable are also companies that might acquire you; VCs know that.)

Competitive Strategy

Describe the competition that you expect to have (near term and long term), and describe how you expect to win against them.

What is Your Advantage?

There are lots of creative people/teams in the world.  You have to assume that someone else has the same idea as you do.  So what advantage do you have that convinces you (and that might convince an investor) that you and your team will win? 

Technical Advantage

VCs will be looking for your technology advantage (preferably a patentable advantage). If you have patentable technology, this is the place to talk about it, and to talk about how broadly you believe your patents will apply. If your technology is not patented (or patentable) then discuss the technical advantages you believe you do have.

Other Advantages

Technology isn't the only competitive advantage. For example, advantages can come from:

• Strategic partnerships
• Established relationships with major customers
• The strength of your team
• Your head-start in the market

Barriers to Entry

• What else will make it difficult for another company to compete directly with you?
• What can you do to increase the size of those barriers to entry?

Summarize your Differentiation

A helpful way to summarize how your solution compares to the competition is to use a simple table listing the competition on one axis, and critical differentiating attributes on the other axis.  Those differentiating attributes are different for each business, but might incude things like cost (low vs. high), ease of use, etc.  Only include factors that actually highlight your differentiation with the competition.