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Know your industry's history  

Charlie O'Donnell makes the point:

What’s tough is when you meet with first time founders that don’t seem to have studied up on their history. Being in venture capital gives you the benefit of having seen a lot of patterns of success and failure—and unfortunately, there are some basic ones that new founders seem to miss. Every sector has a history of attempts at unseating the leaders and disruption that should be evaluated before going all in on an idea. If you’re going to be the next Evite killer, why haven’t the last 15 worked? Why have their been so many attempts at new dating sites, but so very few exits? There’s nothing wrong with trying to improve on what’s been done before, but there’s no excuse for going in blind.

When I started my first startup, I was quick to dismiss the competition. "We'll do it better", "we're moving faster than they are", and so on. Sometimes those statements are true, but in general they show a naive viewpoint and lack of perspective.

Sometimes you are better than the competition, and you do know something that they don't, or do it better, or any number of possible advantages. But unless you can clearly articulate where they've gone wrong and what you've done differently to address this (and how you've tested that your theory is actually correct), those are empty statements that savvy investors will dismiss.

More from the library:
Don't dwell on startup mistakes
Fit your product to the right market
Silence
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