Investors generally don’t like super competitive markets. It can be difficult and expensive to fight for market share against companies that entered earlier and have advantages in funding, scale, and users.

But this doesn’t mean you’re doomed. Not everyone likes first movers. Being first is challenging and expensive because you need to create category awareness and invest heavily in customer education. As a late mover, you enter an established market, which means the market is proven. There’s no need to educate customers. You can identify product gaps, learn from competitors' mistakes, and optimize successful strategies.

Look at Uber and Lyft. Uber captured a significant market share, but Lyft had healthier metrics by raising less money and giving up less equity. As the saying goes, “Pioneers usually die of bug bites and dysentery.”

Successful businesses in competitive markets often solve problems that others have already addressed. They do it better, uniquely, for a different audience, or at a lower price. If you want to pitch investors in a crowded space, your strategy should highlight that you:

• Understand competitive dynamics and acknowledge the crowded market.

• Have carved out a unique niche, positioning, or persona that is currently underserved.

• Have a clear strategy and vision for your moat and how you plan to lead your subcategory.

🐳 How to execute:

• Research the market and competition: talk to users. Find a need that is currently unserved or a persona that has not been addressed.

• Identify a defendable niche: based on your research, find an attractive subcategory or niche.

• Develop a leading strategy: focus on tech or user advantages or unaddressed use cases. Think about how you can outperform legacy companies.

• Build your moat and distribution plan: determine how you will stay ahead. This could involve community-led growth, building an amazing brand, or having the funds to execute your strategy.