How to Compete With Amazon and Google - Y Combinator  ## Metadata - Author: **Y Combinator** - Full Title: How to Compete With Amazon and Google - Category: #podcasts - URL: https://share.snipd.com/episode/973cee53-7d98-4a69-9272-cca9b286c4ed ## Highlights - The 5 Lies Founders Tell Themselves About Competition Key takeaways: • Founders can psych themselves out when they're working on their company because they think they're the only one with the idea. • This can lead to them copying the competitors without thinking about it too much. • It's important to have a first principles approach when building a company. Transcript: Speaker 2 Yes, you know, one thing I've noticed is that I'll do office hours with a company that's doing great and they'll be sort of psych themselves out because they'll just want to talk about How worried they are about a competitor and it will be, you know, a big company and other startup. And they're just like, it's like they've lost their excitement for their company and replaced it with fear. And we end up talking about this at lunch, right? Like, what's going on? Like, why is this company that's doing well? Some of you feel like they're failing. Speaker 1 Well, it's because the competitor raised $5 million Hargent. We all know, whichever company raises $5 million first wins, right? Speaker 2 Isn't that how this works? What do you think Brad? Speaker 1 What lies do you think or how do you think folks are psyching themselves out? Speaker 3 Well, I think when you start working on something, you think you're the only one that's had this idea. You quickly learn that's not the case. And then it can be very easy to start thinking that you have to compete with this company and have to beat them in order to succeed with your own company. And so you start thinking of things like, they're going to steal my customers. I have to steal their customers. They're product roadmap. It must be amazing. So I should copy whatever they do without really thinking about it too much. And it's just a very dangerous mindset that can take you away from thinking about your own customers and having like a first principles approach to building your company. But there's so many lies that founders tell themselves about competition and about what their competitors are up to. ([Time 0:00:50](https://share.snipd.com/snip/89d4e58c-89f8-46c9-a1c2-154f833bd2f6)) - The dangers of thinking you have to compete with your competitors Key takeaways: (* Founders should think about their customers and their competitors before starting their businesses., * Competition is not always a fair fight, and there are often multiple winners., * Founders should be prepared for the most common outcomes of their businesses, which include failure.) Transcript: Speaker 3 Well, I think when you start working on something, you think you're the only one that's had this idea. You quickly learn that's not the case. And then it can be very easy to start thinking that you have to compete with this company and have to beat them in order to succeed with your own company. And so you start thinking of things like, they're going to steal my customers. I have to steal their customers. They're product roadmap. It must be amazing. So I should copy whatever they do without really thinking about it too much. And it's just a very dangerous mindset that can take you away from thinking about your own customers and having like a first principles approach to building your company. But there's so many lies that founders tell themselves about competition and about what their competitors are up to. Speaker 1 When I think about a YC company and competing with folks, oftentimes it goes to my head and the first thing I tell them is like the depressing fact that most likely everyone's going to die. So like you're not accounting for like the most common outcomes like you and your competitors. None of you will make something that people want. And then the second thing they don't count for is that there are lots of businesses where there are multiple winners. How many banks are there? One bank doesn't look at the other banks and say, well, I guess that's it. We've got a full-folded shop. There's already a bank in existence. ([Time 0:01:41](https://share.snipd.com/snip/43344a4c-970f-48ac-9507-c64f98ed9303)) - The Different Perspective of Running a Startup vs. Being a WICC Partner Key takeaways: (* Running a startup exposes you to how screwed your company is every day, and this can be a negative experience., * However, as a partner, you work with companies that have flaws, which gives you a different perspective.) Transcript: Speaker 2 Yeah, I think that's a really important point. So, you know, one of the things I remember, I'm surprised me that most about when I switched from being a startup founder to a WICC partner, is that running a startup, you're exposed every day to how screwed your company is. Like you're just hitting the face with it every day. And so you constantly feel like you're failing. You're not like, you don't know how to build product. You don't know how to manage people, all of this stuff. And like, you see everyone else's exterior and it seems like they're doing great. Right. I didn't like my room the earlier. So I see like, I always just felt like everyone else was just crushing it. And I'm like, man, we suck. Speaker 3 And so it's not even the exterior, it's their marketing. Right. You're seeing they're carefully crafted marketing. Speaker 2 But then as a partner, you work with these companies and you start realizing that like all of them, like, like, I got a really badly flawed somehow. Right. Like, literally in any YC batch, I could take every single company and like pick out some like fatal flaw. And you know that some of them are going to turn out to be worth like billions of dollars, but you can still do it. But like, you don't get that perspective when you're running your own company. Speaker 1 But wait a second, Art. Wait a second. So maybe I shouldn't be worried about my competitor, but this is different situation. We're in a land grab situation. ([Time 0:04:07](https://share.snipd.com/snip/1fc72e16-a08c-47d9-9361-a15e08d6d3e7)) - The Blind Side of Innovation Key takeaways: (* Competitors can and will copy features of companies, even if those features have no clear user value., * This can lead to the company shutting down if it is a disaster.) Transcript: Speaker 1 You know, it was funny because I was thinking about this in the context of my competitors must know something that I don't. So I have to like copy their stuff. I remember back in the day, early in Twitch, back when we were just in TV, we were competing against this company named Ustream and another company named live stream. And inherently, I knew that we were copying each other's features like I knew we were all looking at each other's websites. But there was this one moment where we built a feature that was exclusively for copyright owners taking content off of our site. Like, and it was something you could see on the main site. It wasn't obvious. It had no clear user value at all. And two weeks after we released it, a competitor released the same one. And we were like, oh, crap. Like, we're, this is clearly the blind made in the glide. Like, they don't even know why we have this. Like, we wish we didn't have this feature, but like, they built it anyway. Speaker 3 But then after that, you shut down the next day, right? Because it was a horrible disaster. Right? That was the end of the company. ([Time 0:06:56](https://share.snipd.com/snip/4ae214dc-69c5-4102-ad03-a412cb16ede1))