TBC: Addressing Competition With Investors

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Hey there. Welcome to the back channel today. I want to talk about the things that you should do and the support you should look for. As you were about to launch your fundraise. Now, there are so many things that are hard about fundraising. It's so hard to do. It's incredibly hard to do on your own. It's incredibly hard to do with help. But certainly harder. Banana starting all the way over.

Hey there. Welcome to this episode of the back channel today. I want to talk about the idea of addressing competition during investor meetings. If you are working in a space that is worthwhile, if you're working in a problem area, that actually is valuable. Then there should be actually other people working on the edges, if not directly in competition with what you do. This is something that all you need to be ready for in the conversations that you have with investors.

So how should you approach this? What should your demeanor be? Should you try to avoid the conversation? Should you take it on head on. Well, I like taking the analogy. Via a course that I took way back [00:01:00] in my undergrad years when I was an economics major, one of my majors. and the course was industrial economics.

There was the scenario that was. Has always really stuck with me. It was always very interesting to me, which is if you're opening a store. And you're opening it in a store, in a competitive environment, in a city that already has a version of your store. Let's call it a grocery store. Well, do you know where the best location to open your store is? It turns out the best locations.

And this might be a little bit counterintuitive is actually right next to the other store. Especially, if you believe you are a better version of that store.

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[00:02:00] Why is that? Well, all things being equal. By placing yourself exactly next to your competitor. You cut the market exactly in half. If you guys are exactly the same competitors, you will cut the market exactly in half. And if you're better. Well, then you should own the market because you eliminate the variables of, of location of distance, et cetera. And if you're better than you own the market. I think about that a lot when it comes to how founders should address [00:03:00] the discovery of competitive. Company's competitive products out there. I would highly recommend you don't run away.

you address it with calm confidence. You place yourself right next to the competitor. And you calmly talk about why your direction is going to be great, how you solve the problem, or you understand the customer. You don't talk down about the other competitor. You just matter of faculty, talk about how you believe in your direction. And your differentiation. Okay.

So that's the calm confidence that you need when addressing competitors as you go fundraise. And I hope that analogy from my days and economics class, industrial economics class gives you an analogy that really crystallizes this for you. I hope this was helpful for you. And we'll see you on the next episode of the back channel.