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Do startups need to benchmark competition?
Every startup founder or the team in every pitch mention competition and try to give clarity who their competitors and how they are better than the competition or how they are different from the competitor or even go one step ahead and mention what their competitors are not doing and how their startup is better than the competitor.
First let us understand what competition is, how to compare and then let’s understand should startups benchmark competition. When startups pitch to investors they ensure that there is one slide about competition. Startups always try to show the leader in the segment as its competition.
Benchmarking how they are better than the leader for e.g let’s take rental scooters as a segment. The startup which is pitching to investors for raising funds will showcase the leader as the competitor which is not correct as the leader has already consolidated and has covered milestones whereas the startup which is just starting and hasn’t seen daylight mentions the leader as a competitor.
Competition always has equal parameters for competing be it any sport for e.g boxing bantamweight category means both boxers will have the same weight that is competition to fight for. In company it should be the same day of the company being incorporated and doing the same thing then is what you can bench mark as competition.
Getting data for company which has been registered in the same date and in the same category is not possible, hence instead of benchmarking competition as leader of the segment better to showcase as case study for success possibility and how there is scope for new entrants rather than following the typical rule of showcasing competition which is not.
Company that has not yet started showcasing a leader or benchmarking leader as a competitor is technically not correct and if the investor is serious he would ensure to shred the presentation.