How To Compete With Amazon and Google
Like how the hell does anyone compete with like one of the greatest companies of all time on the thing that they're experts at, right? And it turned out that just like picking the right avocado was too big of a challenge for like this trillion dollar company.
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Hello, this is Michael with Harj and Brad, and welcome to the partner lounge.
Hey, so as YC partners, we work with hundreds of startups and we find ourselves repeating the same advice—something seems pretty obvious over and over again. We found ourselves wondering why. Before COVID, we'd often gather together in the partner lounge at the YC office to try to figure out why this was the case and how we could help startups figure it out faster.
And today we're going to talk about competitors. Harj, do you want to set this one up?
Yes, you know, one thing I've noticed is that I'll do office hours with a company that's doing great, and they'll psych themselves out because they'll just want to talk about how worried they are about a competitor. It will be a big company, another startup, and they're just like—it's like they've lost their excitement for their company and replaced it with fear.
We end up talking about this a bunch, right? Like, what's going on? Like, why is this company that's doing well suddenly feel like they're failing? Well, it's because their competitor raised five million dollars.
Argent, we all know whichever company raises five million dollars first wins, right? Isn't that how this works? What do you think, Brad? What lies do you think, or how do you think folks are psyching themselves out?
Well, I think when you start working on something, you think you're the only one that's had this idea. You quickly learn that's not the case, and then it can be very easy to start thinking that you have to compete with this company and have to beat them in order to succeed with your own company.
So you start thinking of things like they're going to steal my customers; I have to steal their customers. Their product roadmap; it must be amazing, so I should copy whatever they do without really thinking about it too much. It's just a very dangerous mindset that can take you away from thinking about your own customers and having like a first principles approach to building your company.
But there's so many lies that founders tell themselves about competition and about what their competitors are up to. When I think about a YC company and competing with folks, oftentimes it goes to my head, and the first thing I tell them is like the depressing fact that most likely everyone's gonna die.
It's like you're not accounting for the most common outcomes: like you and your competitors, none of you will make something that people want. And then the second thing they don't account for is that there are lots of businesses where there are multiple winners.
Like how many banks are there? Like, one bank doesn't look at the other banks and say, "Well, I guess that's it; we got to fold up shop. There's already a bank in existence."
And so I often think when I'm encountering this fear thing, I like to kind of run with the fear and be like, "Let's fear this out to the endpoint to see what you're really afraid of." And maybe when we open the closet, the thing in the—you know, the boogeyman isn't actually there, as opposed to like we're sitting on the bed and just obsessing over all these things that could go wrong.
Yeah, the boogeyman is not there. In fact, I think oftentimes your competitors are just as, you know, messed up as you are. You read about the fundraising in TechCrunch or whenever, and then years later you talk to someone that worked at that company and they say, "Oh man, what a mess! Like everyone was leaving then. The CEO was on a bender and was all sad because we lost all of our big customers."
You just don't know, and it's so easy to assume that if you're having a hard time, everybody else must be having a great time when everyone is having a hard time.
Yeah, I think that's a really important point. So, you know...