There is no greater compliment than imitation. In marketing circles it’s known as the “me too”. But for a start up, it could mean a competitive spiral of lost revenue and price discounting before you’re profitable.
If your potential competitors have deep pockets you better make sure you have something they can’t copy. Simply being first to market, is rarely enough. Your challenge is cash flow. Even if you still lead the market, they will drain your revenue pool. Intellectual property, channel strategy, customer interface…. something must protect you.
The best way is to have a different system or value chain. Any ‘P’ will do, so long as it isn’t the price ‘P’. The art of war is not to engage, not to compete, to seem too niche for them to consider.
You need to be ensconced in your market by the time you seem threatening.
If you don’t have somewhere to hide strategically, you’ll get whacked by gorillas with deep pockets. Or worse – dismissed by investors before you’re born.