Video by marshallsandman

How to compete in an extremely competitive marketplace. I get this question all the time. Marshall, I'm building in a space that has so many incumbents and so much new competition. Is it worth even building this business? Of course it is. If a lot of people are building in it, it means that there's real money attached to it and you're solving a real problem.

Here are three quick questions that you need to be able to answer thoughtfully in order to proceed in a way that's going to optimize for success. Number one, who's the competition? Seriously, write it down. Who are you going up against? Why? Is there something specific about the way that they do it that you think that you're going to do better leads me perfectly to

number two. How are you going to compete? What exactly about your offering is going to lead someone from the incumbent to you? Is it a specific client sect? Is there some specific part of the client base that you're going to go take five and 10% from a few different incumbents? And number three, what's your moat? What are you going to do that's going to build separation

between you and the next guy? And how are you going to keep them from building into that space? What can you do that can't be replicated in six months? You need to sit and write this down very, very specifically and run at it. Of course, you're going to make lots of adjustments, but you have to be very honest with yourself because if the answer is, I don't quite know,

then you might not be in the right space. And also the startup world might not be totally right for you. That's it. I'm Marshall Sandman, the general partner of Animal Capital. Don't be scared. Go start the business and I'll see you tomorrow.