Startups Not Eating Each Other Like Cannibalistic Dogs

Saturday, May 18, 2019
By dreeves

Dog dressed as a hot dog

Huge thanks to Malcolm Ocean, Christina Willner, and Sean Fellows for conversations that led to this post.
 
PS: As for the startups used as examples in this post: Beeminder and Complice are BFFs and talk about each other all the time. (Really, allll the time.) Amazing Marvin is the newer kid on the block but already plenty of discussion of it in the Beeminder forum and at least one person on the Bee Team is a pretty hardcore fan.

Suppose you’re a spy for Amazing Marvin and you’ve infiltrated your more established competitor, Complice. In fact you’ve utterly pwned them. Evil laughter! Not too evil though. You don’t want to harm Complice’s users or anything. You just want to make Marvin eat Complice’s lunch. So you add a banner to Complice’s front page like so:

Amazing Marvin is a Complice alternative you might want to try!”

I would like to convince you that your evil plans will backfire and that that will literally do nothing but help Complice.

I suppose I’m slightly exaggerating (maybe) about an actual “maybe use our competitor instead” banner, but my point is, there’s a whole list of benefits to openly talking about, helping, and linking to your competitors and the obvious downside — your potential users using a competitor instead — is a non-issue.

What are the benefits? Let us count them:

  1. Creating the link between you and your competitor in people’s minds — so people think of you when your competitor is mentioned.
  2. Creating the link in the Googlebot’s mind — so you show up when people search for your competitors.
  3. Highlighting that the product space is populated, implying that you’re solving a problem worth solving, which helps convince users to actually seek a solution.
  4. Proving that either you genuinely care about the user getting their problem solved even if not by you, or that you’re just very confident users will choose you, or both. (Ok, or you’ve just bought into the argument that competitors help you and it’s purely Machiavellian.)

And what about the obvious downside, losing users to your competitor? It’s a non-issue because 99.9+% of the internet has heard of neither of you. When Marvin gets new users and more attention, almost none of that is at Complice’s expense. In fact, mostly what happens when someone tries Marvin is that a new consumer of productivity tools is born, someone who’s now amenable to trying Complice as well. That effect, of your competitor creating new users for you, dwarfs any user stealing your competitor may do.

(Relatedly, check out runorelse.com which has had that Beeminder endorsement for years now.)

It’s like how our public list of our competitors does nothing but help us by making it more likely that when any competitor gets press, we get mentioned too. We’re constantly pointing journalists to that list and mentioning it all over the web any time it would be too self-promotional to just pimp Beeminder. And it’s a genuinely useful compilation of apps so it’s all very win-win. (Or win-win-win-win: good for us, good for our competitors, good for potential users, good for journalists writing about such tools.)

It’s amazing how small businesses are the diametric opposite of the dog-eat-dog stereotype. And I’m making this kind of Slytherin argument for how it helps your own business but the strategy is identical to just “be a total altruist and help everyone as much as possible”.

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