The Evolution of Startup Competition

📆 Events

Looking to make some friends? Talk about your startup? Gotcha covered with these upcoming events:

• May 7 – How Smart Founders Get Twice the Time to Pay – virtual

• June 4 – Founder Friends TechWeek – New York City

More events coming soon! Stay tuned.

I’m addicted to Notion

At Hustle Fund, there are a couple of tools that our business needs in order to run successfully. One of those is Notion.

Notion is a connected workspace used by thousands of startups. Our team uses it for everything: tracking goals, documenting processes, publishing community webpages, managing our content calendar, organizing product launches, onboarding employees, publish job listings… everything.

And now with the release of their AI tools, using Notion got faster and even more efficient.

It’s hard to fully communicate the value of Notion. Maybe you should just try it for yourself.

Get up to 6 months of Notion – at no charge – with unlimited AI (a value of over $6,000). Access the limitless power of Notion AI to build and scale your company and team with one tool.

*this is sponsored

📰 Today's Edition

Remember when the biggest hurdle for tech startups was "will this thing actually work?"

Back in the ‘90s, founders weren't losing sleep over competition — they were wondering if they could shrink a mainframe computer to fit on a desk without it catching fire.

Ah, simpler times.

Things are different today.

Technical feasibility is no longer the question keeping founders up at night. Instead, it’s: "How do I stand out in this incredibly crowded market?"

Because let's be real — you're not the only one with that brilliant idea. Not by a long shot.

Building a startup ain’t what it used to be

So what happened? How did we go from "can we build this?" to "everyone and their cousin is building this"?

It's simple: all the barriers came tumbling down.

Remember when launching a software company meant purchasing server hardware the size of closets, and spending millions before writing a single line of code?

Now you can spin up cloud infrastructure on AWS for the price of a fancy coffee.

Technical knowledge was once the domain of coding wizards with computer science degrees

But for most software ideas today, you don't need a great tech team. Most anybody can build it.

Harsh truth, I know. But it gets worse.

No-code and low-code platforms have entered the chat. Tools like Webflow let people build functional products without writing a single line of code.

Capital requirements have nose-dived too.

Instagram launched with just $500,000 in seed funding — pocket change compared to what tech companies needed in the 1990s.

And the talent pool has gone global.

A founder in Iowa can collaborate with developers in India, designers in Ukraine, and marketers in the Philippines.

The playing field isn't just level. It's crowded.

The new incumbent advantage

"But wait," you say. "At least the big, slow incumbents give startups room to innovate before they catch up!"

I hate to be the bearer of bad news, but... traditional incumbents move faster than ever.

Microsoft's rapid pivot to cloud computing with Azure and quick response to AI developments is an annoying example of old dogs learning new tricks.

And AI is only amplifying the incumbent advantage.

When Google integrated AI features into Gmail and Workspace, it immediately reached billions of users — an insurmountable head start for startups building similar tools.

Let that sink in for a moment.

New incumbents form quickly too. Companies like Zoom, Shopify, and OpenAI have rapidly become formidable competitors despite being relative babies in the business world.

Remember Clubhouse and its audio rooms?

Twitter, LinkedIn, and Facebook all released similar features within months.

Months. Not years.

The days of having years to establish a lead are gone, my friend.

Building Competitive Moats

Feeling discouraged? I get it.

But there's still plenty of room for startups to thrive — if you're strategic about it.

Here's how to build your competitive moats:

1. Develop technology that's hard to replicate.

Look at Stripe. They built complex payment infrastructure requiring significant technical expertise and banking relationships that can't be spun up overnight.

Or Figma, which solved collaborative design challenges through browser-based solutions that took years to develop.

Impossible Foods invested heavily in R&D to create plant-based meat alternatives that weren't easily replicable, giving them time to establish their brand before the copycats arrived.

2. Create unique distribution advantages.

Notion found traction with designers and creative teams who became raving fans, spreading the gospel of Notion to anyone who would listen.

Canva targeted non-designers with templates and simplicity that Adobe had overlooked in their pursuit of professional users.

Glossier built direct relationships with customers through content marketing years before launching products.

Smartie pants.

3. Identify and serve the forgotten folks.

Substack focused on individual writers when traditional publishing platforms were busy catering to organizations.

Ramp targeted startups and fast-growing companies that established financial service providers had written off as too small or risky.

Sometimes the best opportunities are in the blind spots of giants.

Let’s get real for a second

The days of being the only team exploring a particular software category are gone.

In today's global market, you should expect fast followers on your heels almost immediately after showing signs of success.

It's not personal. It's business.

Your challenge isn't proving your technology works — it's creating sufficient barriers to close the door behind you.

By focusing on hard-to-replicate technology, unique distribution channels, or underserved markets, you can carve out space even in today's hypercompetitive landscape.

And when you're fundraising… make sure you communicate your specific competitive advantage clearly.

Investors understand the competitive realities. They're looking for teams that have identified meaningful moats that can protect their business as it scales.

Your fundraising pitch should clearly articulate not just your vision, but how you'll defend it in a market where technical barriers alone rarely cut it anymore.

Competition is fierce, but so are you.

Rawr,

Kera from Hustle Fund

🎥 Watch This