Interview Failed Competitors

A strategy for evaluating business opportunities by learning from past competitors who attempted similar ideas and failed. This helps identify potential pitfalls and determine if market conditions have changed enough to succeed where others failed.

Key Benefits of Past Competitor Analysis

• Saves time and resources by learning from others' mistakes
• Provides real-world data and experiences
• Helps validate or invalidate current business assumptions
• Reveals potential future challenges before encountering them

How to Execute the Strategy

• Find and contact ex-employees of failed similar companies
• Focus on those who left the company (more likely to share openly)
• Ask about their learnings and what went wrong
• Compare their experiences with your current data
• Evaluate if market conditions have meaningfully changed

Key Questions to Ask

• What were their initial assumptions?
• What problems did they encounter?
• Why did their solution ultimately fail?
• What patterns did they see in user behavior?
• What metrics looked promising but proved misleading?

Example Case Study: Group FaceTime App

• Initial Promise:

  • Fast growth among teenagers
  • 6-hour session lengths
  • Strong initial user engagement

• Fatal Flaws Revealed:

  • Users were primarily teens without cars
  • Usage dropped dramatically when users:
    • Got cars
    • Went to college
    • Lost touch with high school friends
  • No sustainable revenue model emerged

Decision Framework

After gathering information, evaluate:

1. Does the past competitor's experience match your current data?
2. Has anything fundamentally changed in the market?
3. Do you have a compelling counterargument for why you'll succeed?
4. If no strong counterarguments exist, consider pivoting