Please, do not ever say these words to an investor. You are essentially telling them to run. It is heard over and over, but it is never true. Maybe no one is doing the exact same thing, but someone is doing something similar and needs to be acknowledged.
Created to satisfy a desire or need, Company X aims to do Y in a revolutionary new way.
Wonderful – but new way indicates that there is an old way. That old way is your current competition and a major barrier to entry. Creating a more user-friendly/efficient/affordable etc. product or service is only part of the challenge. It is also necessary to get traction. Why are people going to change from the old to the new? How are you going to make it worth their time to switch? How are you going to show off your competitive advantage?
Think back… While it may seem crazy now, companies like Uber had competition when they started out. Who? Cabs. And apps that helped hail cabs (myTaxi, Hailo, etc.).Were cabs doing exactly what Uber does? No. But were they still competition? Oh yes. They provide the same thing – transportation from A to B. In big cities like New York there are a plethora of cabs. While it may be difficult to get them during rush hours, they served their purpose well enough.
But, there is literally NOBODY ELSE doing this!
Great! Why is there nobody else doing this? Has anyone already tried? Why are YOU doing this? If something isn’t broken, often times it won’t be replaced – no matter how good the alternative. As an entrepreneur it is your job to not only show how you are different, but how this difference is an advantage. Just because there is nobody else doing this does not make it a good idea. Of course, there are good ideas as well, but you have to be able to articulate why it’s a good idea, and not just a new one.
When discussing your competition you need to look at companies that are doing similar things. There probably will not be a 100% match for any company, but if a component of your product is already available, that company could be competitive. Especially if they are already large and could easily adjust their product to do what yours does.
Consider the Exit
Many times exits are based on M/A, and often that is done by a company with similar offerings. Acquiring a company to expand a portfolio can have overlap of similar services, with an additional umph of difference. Or it could be an entirely new service. Either way, when looking at potential exits, consider what similar companies have done in the past. This will also help make clear what type of company is a potential competitor. Please, take the time to really get to know your market. You’ll see that competition is there.