How To Compete With Amazon and Google

Startups face challenges when competing with dominant companies like Amazon and Google. Fear of competition can cause successful companies to lose focus and excitement. Founders often believe they have to compete with big companies like Amazon and Google to succeed, but this mindset can distract them from focusing on their own customers and building their company from first principles. The most common outcomes when competing with companies like Amazon and Google include the possibility of neither you nor your competitors creating something that people want and the potential for multiple winners in certain industries. It is important to shift the focus from external signs to the actual impact on customers. Twitch learned the importance of understanding user needs after a competitor released a disastrous feature without understanding its purpose. Focusing on the basics of business growth and continuous improvement is crucial. Understanding and acknowledging competitors, differentiating from them, and delivering more value to end users are key. Building a better product is crucial for competing with giants like Amazon and Google.

Competitors

Startups face challenges when competing with dominant companies like Amazon and Google
Even in areas where startups are considered experts, they struggle to compete with these giants
Understanding and effectively addressing competition is crucial for startup success

Fear of the Competition

Fear of competition can cause successful companies to lose focus and excitement.
This fear often comes from the belief that competitors' funding or resources guarantee success.
However, this mindset is flawed and can hinder a company's growth and progress.

Lies Founders Tell Themselves

Founders often believe they have to compete with big companies like Amazon and Google to succeed.
This mindset leads to fear of losing customers and the urge to copy their strategies without considering their own customers.
These beliefs are often based on lies and can distract founders from focusing on their own customers and building their company from first principles.

Most Common Outcomes

The most common outcomes when competing with companies like Amazon and Google include the possibility of neither you nor your competitors creating something that people want and the potential for multiple winners in certain industries. It is important to face fears, explore worst-case scenarios, and avoid obsessing over potential failures.

Perception vs Reality

The perception versus reality of competing with big companies like Amazon and Google is explored in this video. The speakers highlight the tendency to assume competitors are doing better based on external image and marketing, but stress that successful companies also have flaws and challenges. They caution against solely focusing on the perception of a "land grab" situation and emphasize the importance of customer feedback, losing deals, and product comparison. Shifting the focus from external signs to the actual impact on customers is crucial.

Copycats - Twitch

In the early days of Twitch, the company competed with Ustream and Livestream, often copying each other's features. However, Twitch learned the importance of understanding user needs after a competitor released a disastrous feature without understanding its purpose. This incident taught Twitch the value of talking to users and not blindly copying competitors' features.

Twitch competed with Ustream and Livestream in its early days
Twitch and its competitors often copied each other's features
Twitch built a feature exclusively for copyright owners
A competitor released the same feature without understanding its purpose
The competitor shut down the next day because the feature was a disaster
This incident taught Twitch the importance of talking to users and understanding their needs
Twitch learned not to blindly copy competitors' features.

Back to Basics

Focusing on the basics of business growth, such as growth rate, customer churn, and sales pipeline, is crucial. It is important to avoid getting caught up in negativity and competition with larger companies like Amazon and Google.

The basics of business growth, such as growth rate, customer churn, and sales pipeline, should be the main focus.
Avoid getting caught up in negativity and competition with larger companies like Amazon and Google.

Real Competitive Concerns

Understanding and acknowledging competitors is crucial for startups
Claiming to have no competitors is a red flag
Lack of understanding of the customer and their current solutions
Founders should be aware of existing alternatives
Differentiating themselves from competitors is important

A Better Product - Socialcam

Socialcam faced competition from a better product
The speaker shares a personal experience of a friend switching to a superior alternative
Continuous improvement is important to stay competitive

Structural Advantages - Kiko and Perfect Audience

Structural advantages in the context of Kiko and Perfect Audience refer to the situation where smaller companies face competition from larger players with significant advantages, such as owning the platform or controlling pricing. This can lead to the smaller company being overshadowed or crushed. For example, when Google Calendar was launched, it overshadowed a smaller calendar company. In the case of Perfect Audience, they initially had multiple competitors using the same Facebook API, but when Facebook became a direct competitor by launching custom audiences, it became a cause for concern. As a result, Perfect Audience decided to sell the company.

Key points:

Structural advantages occur when a smaller company faces competition from a larger player with significant advantages.
Google Calendar overshadowed a smaller calendar company.
Perfect Audience faced competition from multiple companies using the same Facebook API.
Facebook's launch of custom audiences made them a direct competitor to Perfect Audience.
Perfect Audience decided to sell the company due to the increased competition.

"Good Enough" example - Microsoft Teams and Slack

Microsoft Teams and Slack are two competing products in the enterprise communication space. While Slack is considered a great product, Microsoft Teams may not be as good but still has an advantage due to Microsoft's massive sales distribution. This shows that having a structural advantage with a product that is "good enough" can be enough to beat the competition. However, Microsoft's strategy is often to copy successful products rather than innovate, which may not always result in a successful outcome.

Microsoft Teams and Slack are competing products in enterprise communication.
Slack is considered a great product.
Microsoft Teams may not be as good, but it has an advantage due to Microsoft's sales distribution.
Having a structural advantage with a "good enough" product can beat the competition.
Microsoft's strategy is to copy successful products rather than innovate.

FAANG Fails

FAANG companies rarely launch products that can compete with fast-growing startups
Building a better product is more important than relying on structural advantages
Companies with structural advantages often struggle to create great products

Instacart vs Amazon

Instacart faces the challenge of competing with Amazon
Amazon struggles with tasks like picking the right avocado
Other companies, like Instagram, likely face similar concerns about Amazon's dominance

Cruise vs Google

Cruise and Google are competing in the field of self-driving cars. Despite Google's head start, the speaker expresses confidence in Cruise's founder, Kyle. The speaker recalls an investor's doubt but acknowledges that betting against Kyle would be unwise.

Build a Better Product

Building a better product is crucial for competing with giants like Amazon and Google.
Delivering more value to end users is key.
Focusing on building a superior product gives an advantage.
Founders should prioritize building a better product over distractions.
Stay informed about competitors without getting discouraged.