What happens if one of the Big Tech copies you?

Hey Founder, what do you answer when an investor asks you "What happens if one of the Big Tech copies you?" 🤓 👇

What they are really asking:

So what happens if your product/service/market shows lots of promise, and a big “bully” with deep pockets decides they want the market for themselves? It’s a classic competitor-focused question, but one that also touches on your secret sauce or unique sustainable advantage.

Where you should look for the answer:

Here, it’s all about demonstrating your knowledge of the competitive landscape you will be facing, not just today in your beachhead market, but looking forward as you grow into new segments. While you may be able to fly under the radar in a relatively small segment initially, as you gain traction and scale, you become more visible. It is therefore important to also discuss how you intend to strengthen your secret sauce over time.

How to make your answer compelling:

Beyond knowing your stuff on the competition and your secret sauce, it is a useful exercise to walk in the shoes of both your customers and the competitor that could be the largest potential threat in future. You do not have to spend a long time on this, but it can generate some useful insights to field investor questions.

Essentially, put yourself a year or two in the future and assume this competitor is making noises about entering. Think about how they would do so, e.g. by developing a new, competing product/service, buying an existing player in the sector or partnering.

• What value would they provide to customers and can they assemble a unique advantage that would trump yours potentially?

• Are there any legacy issues from their existing business that would help or hold them back?

Then put yourself in the customer’s shoes, to consider how they would assess the value you provide versus the new entrant. Can you anticipate any additional value that the new entrant may provide, that you can start building into your product/service before they enter, so you can stay ahead?

While a lot of this is about exploring “what ifs,” be sure that investors will be thinking about them!

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