The first defines themselves in terms of their (perceived) competition. A great example of this has been Sun. McNealy spouted out incessantly against Microsoft even though Sun's actual primary competitors were IBM and HP (while the true threat was the systemic commodification brought on by PCs and F/OSS).
The second defines themselves by the value that they actually deliver to their customers. Craigslist is a poster child for this in the online space.
In terms of the market perception, you should think a bit about who's going to be perceived as the driver/leader of your market and who's going to be perceived as the "me too" player.
In terms of market validation, it's almost always a good thing that you have some competition. For Krugle, we nominally have a fair number of competitors on the surface (including Google) but our actual product blows them away.
In terms of war chests (money), that's an open question. It depends on how creative you can be, how stupid (or not) they are because they have money, whether or not they can actually use the money to their advantage, etc.
The first defines themselves in terms of their (perceived) competition. A great example of this has been Sun. McNealy spouted out incessantly against Microsoft even though Sun's actual primary competitors were IBM and HP (while the true threat was the systemic commodification brought on by PCs and F/OSS).
The second defines themselves by the value that they actually deliver to their customers. Craigslist is a poster child for this in the online space.
In terms of the market perception, you should think a bit about who's going to be perceived as the driver/leader of your market and who's going to be perceived as the "me too" player.
In terms of market validation, it's almost always a good thing that you have some competition. For Krugle, we nominally have a fair number of competitors on the surface (including Google) but our actual product blows them away.
In terms of war chests (money), that's an open question. It depends on how creative you can be, how stupid (or not) they are because they have money, whether or not they can actually use the money to their advantage, etc.