If you are running or working at a moderately successful company, you can be assured that you will at some point face some major challenges when new competitors enter your space. Any vertical where you can make money always has copycats and late entrants, so instead of asking “What if a competitor enters my space?” you should ask “What happens when a competitor enters my space?”

One of my favorite reads is Playing to Win, which digs deep into psychology behind game play (both 1:1 as well as multiplayer) and covers things like sportsmanship, the art of war, and different attack styles. I’ve only read the online version, but IMO is well worth the read if you really want to win in business.

So what do you do as an executive or marketing lead do before a new competitor enters your space to prepare yourself, what can you do when you know that a new entrant is on the way, and once they enter then what do you do?

Here are my thoughts as a business owner and former head of marketing that has had to deal with all three of these.

Before they enter

When you’ve carving out a new niche or taking a new twist on a classic model that has been competed to death, you have an opportunity. As I said above, it’s not a matter of if someone enters your space to take you on as a competitor, but when.

When you’re first starting, the best way to guard against future competitors is to:

  1. Move to build a recognized brand in your space as quickly as possible;
  2. Move to get the best in the market as brand ambassadors, not just customers;
  3. Build systems that work behind the scenes that are hard for your future competitors to handle;
  4. Differentiate your offerings so that they play to your unique strengths, then seek to systematize those so others can learn them.

That last point is especially salient. If you are copying what others have done simply to make a buck, then you are not really differentiating and you’re not innovating.

This also applies when you are scaling. If you are growing quickly because you have a lot of resources or it is a severely underserved market, you can be positive that new competitors will enter soon. Just look at the app HQ, which already has copycats (via ProductHunt’s HQ for X collection):

One of my favorite reads on the subject is Seth Godin’s “The Big Squeeze“, which I have quoted here in its entirety (italics emphasis mine):


For a long time, unionized truck drivers benefitted from work rules, healthcare, vacations, etc. It wasn’t an easy job to get, but it was a career.

Companies started to realize that if they offloaded the work to freelance truckers, people with their own rigs, they could take advantage of a free market. As a result, more and more of the work ended up with independent operators, who got to be their own boss, paying for their own equipment, finding their own work.

The problem, exacerbated by the speed and power of the internet, is that there’s always someone cheaper and hungrier than you are. That if you do undifferentiated work, the market will squeeze you to do it cheaper.

We get (slightly) cheaper trucking. The millions of drivers get exhausted while living right on the edge. They work too many hours, carry too much weight, burn themselves out.

And the same thing is true for anyone who signs up to be a cog in a digital marketplace. Uber drivers, freelance bottom-fishers, hard-working people cranking things out by the pound…

Any market that seems to offer an easy in to the undifferentiated will eventually squeeze them.

The only way to really protect yourself against competitors moving in and eating your breakfast, lunch, and dinner is to offer something that is truly unique and undifferentiated. If you are not offering this and are simply building new features that others do not yet have, it will be necessary to continue iterating and building new features at a breakneck pace to try to stay ahead of the competition. And when that happens, you build an unfocused machine.

Offer what differentiates you from the crowd, as that is your best competitive moat. Play to your unique strengths.

When you know they’re coming

Sometimes you get lucky and know that a competitor will be entering your space in the coming months. Whether you came across this on a forum, in a conversation with another, or they tipped their hand, you’ve been given a gift.

You likely will not know exactly how long you have until they enter, but the fact that you know they’re interested and making strides that way gives you an advantage.

Don’t panic

First, don’t panic if you’ve built your company the way I’ve described in the “Before they enter” section of this post. You’ve built a competitive moat and brand that is the industry leader and will be very hard for them to overcome. After all, your brand has become associated with the space and thus you have an advantage. Brands are not built in a day.

Secure your ambassadors

Second, make sure your ambassadors are actually your ambassadors and not just customers who are happy but will jump ship if they think they are going to get a better deal somewhere else. Bargain hunters are not ambassadors. I recommend taking your best customers (aka your ambassadors) and figuring out ways to make them feel special. Some interesting things that I’ve seen done are Customer Advisory Boards and special Facebook pages.

Identify gaps in your strategy

Third, push on your strategy harder and see where it may have gaps. If you’ve been a bit lazy because you’re the only player in your space that is making you good money, you may have to step on the gas a bit harder and fill in some leaks in your moat to truly have a defensible business.

Understand your to-be competitor

Fourth, try to get a deep understanding of your soon-to-be competitor’s business and how they work. You should find out things like:

  1. How much bigger than you are they?
  2. How much money and how many people do they have to put towards the problem to solve it at greater scale than you?
  3. How might they solve the same problem you are, but in a better way?
  4. How might they get a quicker start on challenging you than starting from nothing?

You might argue that you should be doing number 3 already, but the reality is that often we put off thinking like this because we are so committed to solving things our way. Let having an approaching competitor spark that competitive fire in you and force you to think outside the box and about your business in new ways.

Once they enter your space

Once your new competitors enter your space, it’s game on.

Or rather, hopefully you’ve already done your research and understood how they are going to enter your space, what their positioning might be, and what they plan to do in order to eat away at your market share.

Above all, don’t panic. If you are the market leader, don’t spend too much of your time worrying about what they are doing.

If you are the market leader, hopefully you already have a solid strategy that has been working so far. At this point, it’s not a better strategy that will let you win.

It is speed and quality of execution.

Consider new people

First, if you’re running your business alone, you might need to consider adding people to your team in order to increase the speed at which you are able to execute on your strategy.

Consider new investment or raising prices

Second, if you know that your competitor has a lot more money to put towards the problem than you do then you may need to either consider bringing on outside investment so you can hire and scale faster, or you may need to increase your prices if you are able to (ie underpriced right now).

Execute execute execute

Third, execute like hell. Speed up that pace of innovation, test new products, and if they enter with the same offering then try to differentiate yourself from them. Don’t go downstream though – remember what Seth Godin says:


Differentiate and continue to offer as much outsized value as you can.

That’s how you win and survive new competitors.