Competition

When building a startup focusing on competition is the worst thing you can do.
You should not focus on competition.
You should be aware of what your competition is doing, but your competition should not be the base of what you are doing.
Economics tells us that competition is a good thing and we should encourage competition. Economic history is rather short so we should be careful of accepting all economic theories. Because we are constantly told that competition is a good thing, we start to believe it. The perception is that all companies are similar and are in competition with their competitors, but the reality is that differences are deep. Some companies are dealing with a lot of competition while others are in a monopoly.

So which is better for startups?

“Creative monopoly means new products that benefit everybody and sustainable profits for the creator. Competition means no profit for anybody, no meaningful differentiation, and a struggle for survival.”
– Peter Thiel

Startups should aim for monopoly. Monopoly gives them competitive edge. It gives them differentiation, they are able to show the consumer true value and sell their products on higher margin. Their high margin (money) will give them time, which is a huge advantage for the company. They can use the money and the time to innovate and make their products better, rethink their business model or strategy, or even start a new startup. All this comes for creating a true value for the consumer and by doing that the startup doesn’t need to worry so much about competition and wasting their energy on thinking about what other companies are up to.

For further understanding on this object, I highly recommend watching this short video clip of Peter Thiel talking about monopoly or reading the chapter: The Ideology of Competition in his book Zero to One.
https://www.youtube.com/watch?v=zI7hbEuopLI

Visit to QuizUp

The class visited the startup QuizUp in Laugarvegur and had a listen to the QuizUp team talking about their learnings in making QuizUp for Android. This was their schedule:
17:30 – Welcome to QuizUp
18:00 – QuizUp for Android Saga
18:15 – Cleaner Code
18:30 – RxJava in Android land
18:45 – Couch to 65k
19:00 – Q&A

I enjoyed the visit although I did not understand what the programmers were talking about. The visit gave me an insight into the Programmers culture, how they like to work, what it is that they are really doing, how they think and what they like to do at work. For example I learned that if you give programmers some free time to hold a “hackathon” they will be very pleased. My major is Marketing and for obvious reasons this is not taught in marketing. However it is important to know. In the near future I will probably be work with Programmers and it is important for me to be able to understand them and work with them. I believe that after our visit to QuizUp my communications with the programmers will get better then it has been in the past.