Why Competition is a Good Thing

Sometimes business consists of weird conundrums

We’ve all been there especially in the enterprise software ecosystem. A company you founded, work for, own a part of, or just really enjoy using sees an announcement from Big Company X that they are moving into the space.

We’ve seen this multiple times over the years with AWS announcing DocumentDB to take on MongoDB, Microsoft announcing Power Automate to take on UiPath, Github announcing Github Actions to take on CI/CD products like CircleCI, Cloudbees, etc. We’ve seen it in consumer too like Facebook announcing a dating product to take on Match/Tinder and IG Reels to take on Tiktok.

In all of these cases it is freaking scary. But perhaps Dev Ittycheria, CEO of MongoDB said it best with the below tweet:

Even at the early stage this happens. As an example, in the data streaming, metrics, and analytics layer there is a new company with amazing founders and teams seemingly starting everyday. It is scary indeed initially but below I want to present a framework for how to think about it differently.

Why Competition Is a Good Thing

One of the things that actually excites me is when I see a large company release a competing product to a smaller company. An example for me was when AWS released DocumentDB to compete with MongoDB. I owned MongoDB stock and my first reaction was “oh shit”.

However, as I digested the news, I realized that in all of the priorities AWS could be doing, they instead chose to devote significant resources to building a Mongo clone. Same thing with Github and the CI/CD companies. If a big company with infinite resources and tons of customer feedback, thinks one of the most impactful resource allocation projects for them is to build a competing product? That’s probably a good sign.

When a competitor, especially a large company, enters into your space….it likely means the market you’re targeting is a whole heckuva lot bigger than you originally thought.

The same goes for early competition. If you don’t have any competitors early, it’s likely that either market timing is too early or the market is not big enough to warrant competition to focus on the same problem/customers.

That does not mean that every small company will beat the big company or that you shouldn’t be worried about competition.

Jeff Bezos has the best quote: “Be competitor aware, but customer obsessed."

Competition should not always be scary, in fact in many cases it is a good sign! Try and remember that the next time you see a similar product announced.