One of the first lessons I learned as an entrepreneur is that 99 percent of people will try to talk you out of your business idea.
They will say you are not the first to think of the idea (likely true), that there are strong competitors in your market (fair enough), and that it's risky (guaranteed). But the best companies and entrepreneurs in the world ignore these warnings. Instead, they focus all of their energy on building something for their customers--not their competitors--and their companies are better off for it.
Cases in Point: Instagram, SnapChat, Twitter Built for Users
Consider the following: Instagram was not even close to the first photo sharing application on the Internet. If anything, it was late to the game and seemed to have little to no chance of competing with Facebook on social connectivity or utility. Instead of listening to the naysayers or spending all their time doing market research on what other photo applications might build or release, the Instagram co-founders focused on one thing and one thing only: creating the simplest and most intuitive user experience. The result: Users loved seeing their photos shine, and Instagram was so popular just hours after its release that its systems crashed.
Remarkable products are infectious, and often render irrelevant conventional wisdom about market landscapes and competitor analysis.
People often ask me why companies like SnapChat and Twitter have "gone viral" and whether or not their respective leaders will be able to monetize those products. The truth of the matter is that the best investors, like the best entrepreneurs, understand that companies who build for customers, will win in the long term specifically because they will not make the mistakes of the thousands of companies before them. They won't spend millions of dollars and years asking focus groups what types of ads they will tolerate. Instead, they'll deploy beta experiments to small batches of users to test, learn, and apply based on what actually works and what doesn't.
Ask Your Customers What They Need--and Build That
Regardless of whether your startup is currently an idea that keeps you up at night, a weekend project, or a budding organization of a few hundred people, it's absolutely imperative that you build and iterate based on what your customers want and need instead of what your competitors are doing.
Other companies will, of course, copy you if your product is remarkable; what they cannot replicate is your ability to understand solutions that will make your customers' lives easier, more productive, better, or more fun.
At HubSpot, where I'm the chief product officer, I hold myself and my team accountable to this principle on a daily basis; engineers and developers sit in on customer calls, work with support to resolve tickets, and test their ideas in real-time with people who are using the product on a daily basis. We ship new features daily, and the vast majority of them are a direct result of ways we have identified to make our customers' lives easier, or emerge out of concrete feedback from user forums, customer calls, or user testing.
I recommend this for you too. At the most important junctures of your business, whether that's a funding round, a product launch, a new office opening, or a personnel decision, always solve for the customer. Doing so is the hallmark of companies who win with users and investors alike. Startups have only one true competitor, and that's indifference. So act, plan, and build accordingly.