The first question you hear as a startup is ‘What if your competition starts doing what you do’. Many startups will say ‘We don’t have competitors or we are first in the market or we have X innovation and hence no competitor’.
Reality is you have plenty of competitors. Politely, candidly you should say ‘having competitor validates market need & we will survive-prosper-lead’! As a Startup , you are introducing a solution for which you need a market. You should be worried if you claim you have no competitors.
Customer will hate you if you don’t have competitors, you will be seen as monopolistic, average service, high cost, low supportive company! The reason being they don’t know how good you are by benchmarking with your competitor(s).
Your first few investors (friends, family) will doubt your startup potential as they can’t visually verify scope of growth or proof of it elsewhere. Everything you do would be seen as random, impractical, too optimistic gamble.
Your product would slowly be less creative & less user driven as you won’t be able to offer a disruptive model due to lack of market feedback on how it fares vs other products, what other way same service can be delivered. For example, think how it would be if 37signals was the only startup doing project management solution for decades! Now imagine how Podio/Zoho have taken different approach to similar service hence offering wealth of knowledge & feedback to 37signals. “No competitor” means you will dig your own grave.
Also, you will have biggest issues in attracting top talents.
Your startup will be doing all the hard work to create market, opportunities, rather than co-creating the same in far less cost (acquisition & business development). This high cost would mean your startup is in danger of early death unless your product/ service had some early avatar /competitors to which customers can relate to.
You will suffer due to lack of ecosystem & having to do most related work on your own.
Stand up and admit you have competitor(s) whom you love /hate /ignore /fight.
And if you still think you do not have a competition, read this piece: Substitutes vs. Alternatives – Understand your Competition Better