## How a Startup Can Survive Competition with a Monopoly Company

# Introduction

Should young projects engage in competition? Do they have any advantages over the “whales” of the market, and what should they know when developing a startup to carve out their niche?

Any startup founder, before beginning to implement their own ambitious plan to conquer the market with their innovative idea, must study the playing field and ask themselves: Is someone already doing the same thing? And if so, how can I do it better, higher quality, faster, or cheaper? If you have a solid answer to these questions, you’re practically in the clear.

But the key word here is “practically.” There are cases when, in the market you plan to occupy even partially, there’s already a huge company with a solid reputation.

Does this mean you should abandon your idea and declare the complete defeat of your ambitious plan, which was never even destined to start? Far from it. The main thing to remember is that a head-on attack against a company that’s much larger than yours is not advisable. When a monopolist controls the entire market, that doesn’t mean they completely control every individual niche within that market. That’s the key to a startup’s success in such a situation. If there’s no unoccupied market, you can always create one yourself.

Speaking of the international freelance market in general, it can be said with confidence that it is completely monopolized. And in case of objections – as PayPal co-founder Peter Thiel said in his lecture at Stanford University: “There are two biggest lies in competition: monopolists claim that there are still many other companies in the market and that they are in a highly competitive market, while non-monopolist companies assure that they own a monopoly.”

# The Freelance Market Then and Now

According to McKinsey’s research, in 2012, there were 30 million freelancers worldwide, and by 2025, this number is expected to grow to 3 billion.

In 2013, the number of freelancers in Europe increased by 45%, from 6.2 million to 8.9 million, compared to 2004.

According to Forbes, in July 2014, freelancers and temporary workers in the USA accounted for about 15% of the entire country’s workforce, and it was forecasted that by 2020, freelancers alone would make up up to 16% of the entire labor market. In October 2014, Upwork published data indicating that there were 53 million freelancers in the USA, accounting for about 34% of America’s entire workforce. In 2015, the number of independent specialists increased by another 700 thousand, 60% of whom started earning more after leaving permanent employment. As seen from research data – the international freelance market is growing faster than the forecasts.

This is exactly why the team of the Ukrainian startup Polyglot decided to carve out their own slice of this pie and tailored it to their taste: freelance services of professionals solely in the language sector (text and speech translation, copywriting, foreign language tutoring).

If someone needs shoes, they would prefer to go to a large shoe store rather than go to a shopping mall where, undoubtedly, they also sell shoes. Similarly, when it comes to freelance services: if you need text translation or writing in any language, most likely, people will choose a specialized freelance platform.

# Advantages of a Startup over a Monopoly Company

It seems that a startup cannot have any strong points compared to a huge company. How can a small and little-known project stand up to an experienced and renowned company? What are the secret advantages? – Exactly because it’s small and little-known.

## Advantage #1. Little-known

The low brand recognition of a startup gives it the opportunity to experiment more often. An emerging project has more ground for maneuvering compared to corporations, which themselves limit their range of actions due to their size and the presence of a broad audience, which they cannot abandon by saying: “Sorry, we are pivoting.”

The opportunities for experimenting with functionality and design in large companies are very limited because the slightest mistake on their part will be blown up by the media to obscurity, which could harm the business. Startups, on the other hand, are considered favorably by almost everyone: investors, media, venture capital firms, and even their own audience.

## Advantage #2. Small

“Well, there’s definitely no advantage here,” you might think. You might even quote the ancient Roman poet Ovid: “A small state cannot compete with a large one; a small army cannot compete with a large one; a weak army cannot compete with a strong one.”

But you would still be wrong. Do you know what the biggest problem of large companies is? – Despite their streamlined management mechanisms, extensive customer support, and possibly their own call center with 100 people, large companies will never be able to implement a truly individualized approach to customers. The task of such companies in customer support is to minimize the time spent interacting with users. But quality service cannot be minimized. A genuine desire to help and personalized attention to each customer is the key to the success of a startup that wants to occupy a small niche in the market where a monopoly has long been established.

As Kevin Hale, co-founder of Wufoo, said, in the early stage of his company’s development, he and his team of ten people sent letters by mail to their users, written by hand personally by them. Even Microsoft cannot afford such!

# What NOT to Do for a Startup to Carve Out a Niche Against a Monopoly Company

• Do not create a “small” clone of the monopoly company.
• Do not try to take the entire “pie” from the monopoly company.
• Do not justify your intentions to take the entire “pie” from the monopoly company with improved design or a cool “feature.”
• Do not ignore customer complaints and inquiries.

# Four Pillars a Startup Must Stand on to Effectively Compete with a Monopoly Company

1. Idea
2. Product
3. Team
4. Implementation

Obviously, the idea should by no means be a clone of the product or service that the monopoly company already owns. If we are talking about business clones with key ideas that can be described using minor differences, such as improved design or targeting a niche audience, often such businesses are not competitive.

Based on the above, the key to survival in competition with a monopoly company lies in leveraging all the advantages of the emerging project and in choosing an optimal niche in an already extensive, previously occupied market.

By strategically focusing on these pillars and avoiding common pitfalls, startups like Co-Founder Ai can navigate the challenging waters of competing against established monopolies. Leveraging insights from venture capital firms, angel investors, and platforms like Y Combinator, startups can secure the investment opportunities near you to fuel their growth and innovation.

For those looking to start a startup, understanding these principles is crucial. Engaging with private equity companies, vc firms, and utilizing resources like the angels list can provide the necessary support to thrive in a monopolized market. Platforms such as Start Engine, Techstars LLC, and 500 Startups offer invaluable guidance and funding to budding entrepreneurs aiming to disrupt established industries.