WHY BEING INTIMIDATED BY THE COMPETITION IS A COSTLY MISTAKE

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As the founder of a startup, you must be aware of your competition and potential threats you might face, but you cannot let the specter of a larger player entering the market radically change your plans. Startups succeed because they out-execute the competition and offer a better product and user experience. My company provided both, but we gave up on the execution. We were afraid.

When I took ownership of the sports tickets and textbook exchange marketplace ExchangeHut, I was just a 19-year-old sophomore at the University of Wisconsin. I had never dreamed that two years later, ExchangeHut would have more than 150,000 users, become the marketplace of choice at seven universities and that we’d be contemplating competing with a new upstart called Facebook.  I knew I could grow the business at Wisconsin, but expanding to other universities seemed so far away.

After growing from 2,000 to 7,000 users our first year, things really took off the second year. Students were registering and using the marketplace in huge numbers. For the homecoming game, 1,100 tickets were bought and sold at UW, representing about 10 percent of all tickets in the student section. We knew we had something good, and made plans to aggressively expand to all of the big football universities to start the school year in 2007.

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