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Competition in Business: Why You Should Stop Worrying About Your Competitors

Many entrepreneurs we speak to obsess over what their competitors are doing. They dig for information like how large the competitor is and how much money the competitor has raised. While it’s good to know where you are in the market relative to peers, overly concerning yourself with what your competition is doing is counter-productive. Below are a few things you should stop doing in regards to monitoring your competition in business:

Competition in Business Isn’t a Comparison Game

Stop Worrying Every Time a Competitor Raises Money

Especially if you’re in a new market. A lot of that money your competition in business just raised will inevitably go to building the market, which is positive for you. If your competitor is throwing a lot of dollars at marketing to make customers aware they exist, savvy customers will often research alternatives which means they’ll inevitably find you as well. So long as you have a great solution, your competitor’s marketing spend will actually result in new business for you.

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Additionally, the more money your competitors have raised, the less acquirable they are. For instance, one of our portfolio companies has a competitor that raised $50mm+ at a nine-figure valuation. This makes them unable to be acquired by all but the largest of entities or they have to IPO. Our portfolio company, however, has raised less than $6mm and the last valuation is in the teens.

Competition in Business

This means when it’s time for M&A because we’ve raised less money at reasonable valuations, there is a far larger universe of acquirers that can scoop us up for $30mm+ and we’ll be excited about it, whereas a $30mm acquisition for the competition in business is completely off the table.

Stop Worrying About Competitors’ Revenue

Let’s say you happen to find out a competitor is doing $100mm in revenue but you’re much newer and younger, only doing $1mm. How does that piece of information change the way you do business?

The answer is, it doesn’t. You still need to get up every day and build the best business you can, no matter where your competition is a business is, so stop trying to figure out how many employees they have or how much revenue they generate.

Focus on the Right Questions

The real focus should be on the questions that matter: ‘are you losing customers to competitors?’ and ‘are you beating out your competitors for new clients?’ and ‘are you offering a superior solution?’ These questions are far more important than what a competitor’s market share, revenue, or employee count is.

Remember eBay’s story. In 1997, eBay was still a young company with $6.7 million raised in a venture round led by Benchmark.

At that time, The Economist estimated that there were more than 150 online auction sites on the Web. While one of those was far ahead of the rest, backed by Kleiner Perkins, and was already a public company with a market capitalization of about $175 million.

However, eBay beat everyone because they focused on building the best solution they could and grew responsibly, focusing on profitability versus making a bonfire with their cash just to build market share.

Competition in Business Shouldn’t Change How You Run Your Business

In summary, it’s valuable to understand where your competitors are, but it really won’t and shouldn’t change the way you run your business, so don’t obsess over it.


Sammy is a co-founder of Blossom Street Ventures. They invest in companies with run rate revenue of $2mm+ and year over year growth of 50%+. We can commit in 3 weeks and our check is $1mm. Email Sammy directly at sammy@blossomstreetventures.com.