A post inspired by a question on Quora: how to talk about competitors in a VC pitch?
- There is no business that does not have competitors. If you say so, you just lost a lot of maturity and credibility points. Maybe there is no company that does the exact thing you do, but people have alternatives. (Before the advent of the car, people used horses to get around). Discuss them.
- There is not much point in hiding the truth. Smart investors will find out in subsequent phases of the due diligence, and when they find a big competitor at this stage, you will have lost significant integrity points.
- Find a good visualization to show your distinctiveness. Put the competitors in some sort of 2x2, or a heat map that shows on what aspects you are similar and what aspects you are different.
- Sometimes competitive differentiation is not just about product features. Maybe your competitors are not focussed enough (they are part of a larger organization), maybe you move faster than your competitors (“look at their roll outs over the past year”), maybe you focus on a different geography.
In short be honest, but have a good story at the same time.