Hoffman believes an entrepreneurial venture will face competition by either innovating against no competitors or against slow competitors. If a startup faces a smart, aggressive competitor, they must be really sure of what they are doing. He elaborates on this point with the example of 'Friendster' losing its first mover advantage to 'MySpace,' due to a lack of marketing strategy.
Author and MDV Venture Partner Geoffrey Moore explains why companies must, at minimum, keep up with competitors to be considered by customers. According to Moore, every quarter a company does not catch up to a competitor's offer is just another chance for that competitor to gain momentum. Moore uses numerous examples from the technology sector to illustrate the danger of being too proud to assimilate a competitor's innovations.
According to Aaron Levie, CEO and co-founder of Box.net, successful startups need to be agile when testing ideas in the market and quick to shut down ideas that don't work. Beyond the power of learning to "fail fast," Levie advises close examination of who you are actually competing with to discover ways to innovate that competitors may not be built to do.