Competitors are generally smarter than you wish they were.
If you haven't seen the movie Butch Cassidy and the Sundance Kid, picture this.
Two intrepid, highly creative entrepreneurs of the late 19th century have annoyed their competitors. The entrepreneurs are, in fact, notorious train robbers; and the competitors are professional security agents engaged to bring them to justice. The entrepreneurs are trying to outrun their pursuers in the high desert of the American Southwest. They just can't shake the skillful and persistent agents. They are cornered.
Butch Cassidy: They can't track us over rocks.
Sundance Kid: Tell them that.
Butch Cassidy: I couldn't do that. Could you do that? Why can they do it? Who are those guys?
When Butch and Sundance concocted the business plan for their gang, the Wild Bunch, they fell into a very common trap. They underestimated the competition. They thought they were up against small town sheriffs and civilian deputies. With the element of surprise, strength of numbers, and better horses, they could swoop in, rob the train or the bank, and be practically un-catchable.
Then the railroads changed the game. They hired the Pinkerton Agency to destroy the Wild Bunch. The Pinkerton professionals could ride the best horses, hire expert trackers, and assemble awesome firepower.
By some accounts, Butch and Sundance stole over half a million dollars before they were forced to flee to South America. There are differing versions of their final days; but they most certainly did not die peacefully.
A sadly pervasive startup Mistake is the presumption that a market leader will not react forcefully or cleverly to the entry of a fresh competitor - or that there will not be yet another entrant, complicating the situation even further.
The initial Market advantage provided by your Magic can evaporate almost instantly as a result of defensive action by the previous owner of your customers, or by the appearance of something even more magical that defeats you both. Failure to consider this inconvenient truth can easily result in your untimely demise.
Ouch!
P.S.
The movie is really worth watching, by the way. Here's one reviewer's comment.
"Calling Butch Cassidy and the Sundance Kid a great Western is like calling Dom Perignon a really great bottle of grape juice. Yeah, that's correct, but you're missing the point entirely."
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