Dealing with competitors without turning your product into Mr. Tumnus

By Hayden Williams , written on August 4, 2013

From The News Desk

This is the fifth in a PandoDaily weekly series that chronicles the experiences of a young entrepreneur as he bootstraps his startup. Read Part 1, "The less-than-glamorous life of a young entrepreneur,” Part 2, “How to survive co-founding a company with a friend,” Part 3, “Starting a company and having a girlfriend isn’t easy,” and Part 4, "Customer validation: from lean startup to craigslist." Come back next Sunday to read the next installment.


I was convinced that the idea of an online-to-offline professional networking platform was novel. Sure, there were dating sites. But surely no one had ever thought to apply the framework of dating sites to a platform to facilitate informational meetings, not dates, with strangers. No one was working on anything like this….well, except for people that hang out in “niche” social networks like Twitter and companies covered on startup-centric sites like PandoDaily.

But I had no exposure to those sites in my prior life at an investment bank. Sites like Twitter and “propagandistic” media platforms that cover entrepreneurs were blocked at work. Anyway, these weren’t online communities where my friends or co-workers spent much time. When my co-founder Paul and I quit our jobs, we worked to immerse ourselves in the startup community, attending in-person meet-ups and checking out the social networks and websites where startup folks spent time.

“Holy shit, you see what these guys are doing [insert link of company with any kind of professional networking or recruiting element]” was a gchat Paul frequently received from me in the first few months after starting Treatings.

People may have seen trailers for the 2012 movie "Man on a Ledge." I think it may have been loosely based on my early reactions to discovering new Treatings' competitors and Paul trying to talk me down.

My study of Twitter had quickly turned into a full-blown addiction, and soon it seemed like every other tweet was chronicling someone building something similar to Treatings. Every time I saw a funding announcement or any press release that alerted me to a company trying to connect professionals, I had a “throw hands in the air, the world is ending” reaction. This caused a laughable amount of stress and a less amusing amount of time-wasting.

“Have you seen Clarity? You can use it to get advice from experts over the phone. You have to pay to speak with most people, we don’t want our members to charge money for their advice, right?” I asked Paul after reading a write-up about the company.

“I don’t think we want to charge individuals since we aren’t about providing access to recognized experts. It's probably more sustainable to facilitate mutually beneficial conversations without money as motivation,” Paul replied.

“Yep...right,” I said. “But don’t VCs say that it’s good to charge for your product somehow to prove you’re solving a real problem for your users?”

“Damn...ya. And man, it’s nice that Clarity doesn’t have the geographic limitations that come with facilitating in-person meetings,” Paul said.

This is one of many examples of conversations Paul and I had after discovering companies building platforms adjacent to Treatings. In these “crisis management” situations, no aspect of Treatings was too sacred to reconsider, all because some other company doing something remotely similar got a bit of press and therefore must have known more than we did.

“Here’s a service that blind matches you with someone else and you meet for lunch," I said to Paul. "We still want to have an open community, where individuals can propose informational meetings with any fellow member, right? We’ll never match anyone, that will differentiate us.”

You’d have thought Elon Musk was running every startup we read about. For many of these companies that crossed our radar, we’d discuss their product features as a binary option: either we replicate the feature (since they must know something we don’t) or do the exact opposite, because surely they had already cornered the market.

At this point, we were only just beginning to build our alpha. On paper, we had put ourselves in a good position to build a helpful product. We were solving a problem we had. As discussed last week, we talked to many friends, past co-workers and strangers to see if this was a problem others had, and we tested solutions as best we could before building. But, whatever competitive advantage we had was threatened by pursuing a defensive strategy of making decisions based on what other companies were doing.

Imagine Mr. Tumnus, the faun from "The Chronicles of Narnia." If not familiar, just imagine a weird creature with hooves and goat legs, a human torso and head, and horns wearing a scarf and holding an umbrella... Okay? Well, we were going down a path that would have turned Treatings into the Mr. Tumnus of networking sites, an inexplicable, disjointed amalgamation of other companies.

There is something to be said for borrowing good ideas wherever you can find them. But there’s a difference between evaluating what others are doing well and making reactionary decisions based on every move by a competitor. While we were building the alpha in the spring of 2012, I heard NCAA basketball commentator Bob Knight say something during the pre-game show for the Louisville v. Kentucky Final Four game, which helped me realize how counterproductive a purely defensive strategy can be:

“Louisville has to focus on what they do best on the floor," Knight said. "Rather than approaching the game from a negative standpoint of what they must do in order to beat Kentucky, they should make Kentucky face the best they can offer.”

I realized as soon as we started focusing on what others were doing, rather than concentrating on our core competencies, we were doomed. We had to continue on our optimal trajectory, as defined by our mission and the feedback we were getting.

While we got better about having an offensive mindset, it didn’t cure our unhealthy obsession with competitors. It took reading an old Paul Graham post to really understand how futile that was.

Notably, he said, “Even if you find someone else working on the same thing, you're probably not too late. It's exceptionally rare for startups to be killed by competitors – so rare that you can almost discount the possibility.”

I realized that even if I didn’t expect there to be so many potential Treatings competitors, their existence didn’t change anything. I wouldn’t have quit my job to build something I thought would be easily executed, and therefore easily replicated.

I have a healthier, passive interest in what other companies are building. I’ll just have to hope the tin foil hat I wear at night continues to shield my brain from mind-reading competitors.