Focus on customers and don’t think about competitors is a cliche in startupland. Context matters on when it is and is not relevant. Broadly speaking, focus or obsess over customers, existing and prospective, and be vigilant about competitors. 

YC advises “worrying about your competitors is nearly always a very bad idea.” Notice the caveat, “nearly”. They go on to explain that competitive dynamics are “highly unlikely to be [important to the success or failure of your company] in the first year or two.” This context is lost in the cliche. 

A market has competitors.  

An existing market category has competitors, by definition. A new market category may not have identifiable competitors—this can cause doubt whether there is really a new market. Creating a new market category is not only hard, there is also indirect competition for prospective customers’ budget and mindshare, and success attracts competition and new entrants.  Secondly, just like you do, competitors pitch to prospective buyers who then want to understand how you are different from competitors. 

Focus on customers with your unique value proposition

A unique value proposition are the unique attributes of a product or brand that convince customers to use or purchase it instead of its competitors (and perhaps, substitutes too). This is also known as the unique selling proposition or USP.  This is formally expressed as a positioning statement to position the offering in the target customers’ minds. 

Measure competitive performance

Track measurable key metrics related to customers and operations metrics against competitors, aka the market, because other external and internal stakeholders are. Example metrics are unaided brand awareness, competitive win rate with qualitative win/loss, and financials. 

So, focus on customers, existing and prospective, while being vigilant about competitors. 

PS: Check out more articles on building products. I write to pay it forward and to clarify my thinking.