Chapter 3
Customers and Competition
In this chapter, you will explore two important fundamental components of a winning business model—the market (customers) and industry (competition). Your startup must be different in a way that’s important to your customers. Without meaningful differentiation, you’re forced to compete on price, which puts your startup on death row.
Here, you’ll learn how to use your competition to gain an advantage, how to break down a market, and why that’s so important for customer acquisition.
Most importantly, this chapter gives you the opportunity to step away from your idea and take a broad look at your proposed battlefield. As Warren Buffett famously said, “When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is usually the reputation of the business that remains intact.” No matter how good you are as an entrepreneur, it’s hard to succeed if you pick a shrinking market or a cutthroat industry. Avoid the most common pitfalls and learn how to identify promising opportunities with the strategies presented here.
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