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Plan Accordingly.

By Joseph Flaherty, Director of Content & Community

There was a period from 2000–2012 or so where there were massive opportunities where the incumbents just didn’t understand the transformational potential of the web.

However, circa 2019, digital natives are in charge, or at least influential, at most companies. The arbitrage window of “dinosaurs vs. disruptors” has closed. There’s plenty of space for startups, but it’s not enough to count on a competitor being computer illiterate. One bit of advice for startups pitching VCs — don’t try to frame your competitors as being dumb/slow/lazy.

This is especially true in industries where there is an old-line leader *and* a sizable startup. For example, there have been a lot of startups that have tried to go after the home security market and they’ll bash market leader ADT as a company stuck in the 19th century.

That’s true enough, but getting into that market also means competing with Chad Laurans and SimpliSafe, who is really smart and get tech natively. It’s not enough to talk about how you’ll defeat ADT, but how you’ll beat ADT *and* SimpliSafe.

This is even true of the CPG boomlet:

Dollar Shave Club got P&G into a lather, but Gillette quickly drew blood with a D2C offering.

Casper roused big mattress, but the industry bounced back with strategic acquisitions.

Having “stupid competitors” isn’t a long-term strategy.

In fact, supposedly old-line companies are sometimes actually *more* sophisticated technologically than the startups they buy, and the acquisitions are as much about market signaling as tech transfer.

IMO, this dismissive attitude is most common in healthcare. Often, a bright young technologist will have a sub-optimal health experience and assume they can slice through the Gordian Knot of medical inefficiency with inspired code and a healthy dose of braggadocio.

What they fail to recognize is that the industry isn’t dumb, or behind the times. It’s governed by a different philosophy (Do No Harm > Move Fast and Break Things), and beholden to complex incentives and entrenched interests that must be accounted for.

My advice: spend less time criticizing competitors, and more time conveying a clear understanding of the core industry dynamics, how they shaped the industry as it stands, and how they can be harnessed or modified to your benefit.

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