Competition is not market validation

2/11/2026 at 4:25:44 AM

I've been building startups for 15 years now and through a lot of pain, reflection and study have learned:

- markets are patterns in what people are trying to get done (importance / satisfaction)

- having an objective to validate a market is foolish for startup founders, maybe it makes sense as DD for vcs but they never do it, which is also foolish (founders should be trying to discover and understand markets, not validate them)

- getting good at quickly discovering and seeing truth in markets is a skill that can be developed, and is extremely valuable for engineers to learn

- opportunities are all about timing, and requires knowing about lots of markets and lots of tech and seeing how they can come together

- the timing is all about knowing how good tech needs to be to be better at getting customer job done, which requires understanding tech and empathy for customers (or luck)

- pmfit failure rate is so high because most founders don't even know what a market is

by FloorEgg

2/10/2026 at 10:28:00 PM

My views on market validation have changed with age. What I've observed after talking to hundreds of founders is that it's now so easy for someone to enter a market that it seems like those that are successful are the ones who managed to _create_ their market. No matter how smart or how good your idea is, many many successful ventures are successful because of some intangible / hard-to-reproduce circumstance that allowed them to create the market. It could be investor /pr momentum, connections, regulatory friction or some other intangible, but whatever it is - it's not something that could be easily reproduced because it's nuanced for every founder and company.

by joshuamcginnis

2/11/2026 at 12:25:38 AM

Markets are formed from societal conditions, businesses emerge within that. Nobody "creates a market" - not even market makers. What you're observing is the discovery of a series of repeatable process that perfectly match the ability for 2 or more parties to exchange value in a safe and understood manner relatively to the period in time. The systems and processes are all relatively the same in most business regardless of industry or size, what differs is: nuanced for every segment and therefore SAMs, TAMs, TAMs of TAMs. Said simply: being the first to find the right product-channel-timing fit for demand that already existed in some form.

by neom

2/11/2026 at 12:41:36 AM

"Don't worry about people stealing an idea. If it's original, you will have to ram it down their throats."

by hinkley

2/10/2026 at 10:46:51 PM

i guess its called the unfair advantage and there is even a book by the same name!

by syed123

2/11/2026 at 11:33:05 AM

Yes, totally true. This is dangerous though when those circumstances change and basically invalidate the whole category.

I can think of NFT infrastructure here:

Various product categories were created with market leaders that owned them.

But the NFT hype didn’t hold and we effectively realized the use cases didn’t manifest beyond ZIRP-driven speculation and a small collector-artist scene.

So that can negate the whole category or crown a different winner when a technology changes.

Imagine if we used NFTs to verify if an AI or human made a piece of media.

Suddenly “marketplace” becomes a much less interesting category than scalable, fast APIs to create NFTs

by FinnLobsien

2/10/2026 at 9:15:14 PM

This one strikes straight to the heart. We pivoted post YC batch to what was hot at the time and saw a lot of competition (some raising millions more than us). We thought this market validation. Five years later, almost every single company on that list has either died or pivoted.

by nkotov

2/11/2026 at 7:35:40 AM

I mean, markets and industries change as well. Companies that have product market fit today can find themselves having to pivot as the sands shift under them.

by enraged_camel

2/10/2026 at 8:16:23 PM

Ctrl-F: "Customer" (2 results) [both describing customers as a fungible always present entity that must deal with you].

Yea.. maybe change your focus?

by themafia

2/10/2026 at 11:49:47 PM

But I thought money comes from investors?!?

by snovv_crash

2/10/2026 at 8:09:25 PM

Ignore the competition. Dont ignore their customers.

by leetrout

2/10/2026 at 9:51:36 PM

If they don't have customers you won't either.

by bluGill

2/10/2026 at 10:22:44 PM

If they don't have customers, they aren't competition.

by xboxnolifes

2/11/2026 at 2:12:12 PM

You might think they are competition though.

Or they might have a single customer - which because they treat well and charge a fair price you won't be able to get away from them.

by bluGill

2/10/2026 at 10:34:45 PM

competition is for losers. https://www.wsj.com/articles/peter-thiel-competition-is-for-...

by tehlike

2/11/2026 at 12:43:17 AM

Yes, let's look to the founder of Palantir for life advice. Great plan.

by hinkley

2/11/2026 at 1:29:14 AM

He'd be fairly good for business advice though

by zeroCalories

2/10/2026 at 11:00:58 PM

Sure, monopolies are great for the C-suite, but they turn out to be really bad for the end users and customers, the real losers when there is no competition.

Get in loser, we're going for a monopoly! It's all fun and games until you're locked in and enshitification sets in. I would sooner go without than get fooled again.

by sdellis

2/10/2026 at 11:52:38 PM

Please read the article before responding.

by groundzeros2015

2/11/2026 at 2:39:48 PM

Please say something intelligent about a link when you drop it. No one can tell if you're being sarcastic or not.

I did watch the video of him and I can confirm (so no one else wastes their time) he does not address why monopolies are great for everyone other than the CEO. But he does go into depth about why women should not wear Hillary Clinton style pantsuits when pitching ideas to him. Noted.

I am not sure if the video is the same as the article, but there is no way I am going to pay a penny to hear what Theil has to say. Honestly, after I heard him rambling about the anti-christ crap he spews I would pay for him to stop talking.

by sdellis

2/11/2026 at 3:29:39 PM

If you don’t have a response to an article or don’t like the author, just move on.

The rude thing would be to respond based on the title, when the article is actually about something else.

by groundzeros2015

2/11/2026 at 3:54:45 PM

So what did you think the article is about? The polite thing would be to discuss it. That's what HN is here for!

by sdellis

2/12/2026 at 3:21:40 AM

I guess I’ll assume you’re asking in good faith.

The article is not about how monopolies are good for society.

It’s about how businesses over emphasize small differences which make them indistinguishable from their competition.

It’s better to be in your own category rather than a slightly different permutation.

Capturing the value you produce from a business is actually very difficult. Think about how many Facebook users are a net less for the business. Good business plans also plan for capturing value.

by groundzeros2015

2/11/2026 at 12:43:47 AM

The paywalled, appeal to authority article?

by hinkley

2/11/2026 at 1:33:34 AM

So, you didn't read it either?

> appeal to authority

Very true, reading the article before commenting is definitely not for "free thinkers".

by groundzeros2015

2/10/2026 at 11:03:26 PM

That's not what i quite meant, but yeah. Competition is good for consumers.

by tehlike

2/11/2026 at 12:48:26 AM

HN is a site aimed at future C-suiters and those who willingly make them rich. It's on target.

by direwolf20

2/10/2026 at 11:14:32 PM

Yeah customers are market validation, not merely the existence of competition.

If your competitors have customers, I think that is a sign of market validation. If they do not, then you might not either.

by zffr

2/10/2026 at 8:21:15 PM

Why not check your passion and interest regardless of presence/lack of competition and then you can play a long game instead of being in a reactive state.

by syed123

2/10/2026 at 9:34:30 PM

Being passionate and interested in a problem doesn't mean there is a market for said problem. This doesn't mean that it's not valid to feel that way, but a viable business might be hard if not impossible to build in that niche. Maybe I'm passionate about and interested in ornamental gourd futures [0], doesn't mean it's a way to build a business.

[0] https://www.reddit.com/r/wallstreetbets/comments/kzoh1c/i_am...

by Etheryte

2/10/2026 at 10:29:40 PM

very valid point- but people do start with passion and iterate being the keyword based on understanding users and the market - however if you jump straight into competition/market without having interests or passion then you are driven by numbers and other people and have nothing to fall back onto in terms of purpose/vision/mission - so someone passionate in ornamental gourd futures can use the passion in it to underdtand other peoples/passion or interests in it and then in the process develop your understanding of them to feed what they are looking for coming from your evolved passion now - youtube was hotornot pics to begin with!

by syed123

2/10/2026 at 9:57:23 PM

Depends on your passion/interest.

This article is assume startup - you raise a lot of money and get a lot of people to help you build the product fast to get to the very large market. A valid strategy and can earn you a lot of money if there is a large market you can serve.

However there are a lot of markets that are not that big. If your passion is something Pet Rocks - that will probably be a tiny market (it was once big for a short time, but the time is over and unlikely to come back - thought maybe I'm wrong). You are unlikely to every grow a large business because there are so few other people interested in your passion.

There are other markets where your interest/passion will make one person a nice income, but can never scale to a large company. The investors this article is concerned about want nothing to do with it: they can never make their investment back. However you as a person can make a lot of money in this niche self funding the company and growing no faster. It will be hard work, and it will only get you into the lower end of the upper middle class, never rich - but that can be a nice life.

Or you can discover the hard way there is only so much you can take of your interest before you burn out.

by bluGill

2/10/2026 at 10:31:10 PM

then you can passionaltey study people and find if they are not passionate in your passion then what passions they have and make their passions evolve your passions to passionately help their passions.

by syed123

2/11/2026 at 9:31:40 AM

It depends on how you define competition. If you define it as something other than actual customer demand, then Of course, this isn't validating.

Lots of companies successfully raising funds isn't market validation, but who ever said it was?

by dubeye

2/11/2026 at 9:49:26 AM

> something other than actual customer demand, then Of course, this isn't validating

This is tautological as there is no other way of reading customer demand than the market. Otherwise, I suspect, the vast majority of customer demand would not be available to purchase at all.

by FranklinJabar

2/11/2026 at 5:46:10 AM

not an expert by any means but just my 2 cents, if a guy is willing to enter their cc and pay for your product, there is no bigger validation than that. everything else feels like smoke and mirrors to me

by vivzkestrel

2/11/2026 at 5:06:57 AM

[dead]

by chenmx