Defining market & competition
Defining the market and competition for a startup is very dicey in the early days of the startup. This has been one of the problem areas for startups in early days where in the founders thought process goes to way beyond with vision of the startup.
Lets analyse this problem with an example, if you are startup is in unique space of creating original content for clients in media field.
The founder looks at it with a research of original content on google and thinks that the market for his startup is very huge and which gives him the thought process that if I launch my startup in creating original content then my startup will easily get funds and I can grow big.
So he starts with research on internet to understand and he gets satisfied that even before starting his company, he feels his startup is going to be success story.
Founders feels that whole of India is a market and looking at all research reports from BIG research companies which gives him the confidence that there is huge market for his service.
Then the founders get started with big jargons like SWOT analysis which has nothing to do with the startup as SWOT analysis is used by companies which are in well advanced stage and also the founders don’t understand that SWOT is just subjective analysis which is not backed by objective analysis or any confine numbers to back the thought process.
As founders have researched and come across SWOT analysis they feel writing SWOT analysis will get funds, which is not the case.
The next thing founders do is look at competition with companies which are already established and have been pioneers in the industry, the startup which has not even seen the day light and having not even single client to validate the revenue, but on presentation feel having competition analysis is something big which will raise funds.
Then the founder finds out that the companies in competition is missing one service and he feels as his startup is providing the service so he goes on to say my startup is way beyond the competition and all competition are doing these things and my startup does not have competition.
For arriving at these statements its easier to do on presentation and in thought process, but these big words ensure that the founder jumps the bandwagon on the basis of these reports.