In a recent LinkedIn post, Mario Hernandez shares a strategic framework for founders when encountering startups that appear to be direct competitors. Drawing from his experience with two company exits, Hernandez emphasizes a shift in perspective from superficial feature comparison to a deeper analysis of problem-solving, behavioral change, and market competition.
Hernandez recounts a recent instance where he identified a startup with a similar buyer, features, and significant funding. Instead of succumbing to the initial urge to obsess over the perceived threat, he advocates for a more nuanced approach. He outlines three critical questions founders should ask:
“Are we actually solving the same problem?”
He elaborates that products can appear identical externally but serve entirely different underlying needs. This distinction is crucial, as he notes, “Same problem. Two products can look almost identical from the outside and still exist for completely different reasons.”
Dissecting Competitive Overlap
The second key question proposed by Hernandez probes the behavioral aspect of the market.
Challenging Behavioral Assumptions
Hernandez posits that even if a startup targets the same buyer persona, it doesn’t automatically equate to direct competition. The critical factor is whether the products aim to alter the same user behaviors or workflows.
“Are we trying to change the same behavior?”
According to Hernandez, “Same buyer does not automatically mean same competitor.” This highlights the importance of understanding the customer’s existing processes and how a product integrates into or disrupts them.
Identifying True Market Threats
The final, and often most revealing, question in Hernandez’s framework focuses on the financial aspect of the market.
The Dollar Test for Competition
Hernandez suggests that the competition for the same financial resources is a strong indicator of direct rivalry. If a customer could realistically choose between both products for distinct reasons, it suggests an adjacent market rather than an immediate threat.
“Are we competing for the same dollar?”
He explains that this question typically clarifies the competitive landscape, distinguishing between companies that are truly vying for the same customer expenditure and those that operate in related but separate market segments.
The Danger of Feature Reactivity
A significant portion of Hernandez’s post addresses a common pitfall for founders: reactive product development based on competitor features. He warns against the temptation to mirror features observed in other companies, a strategy that can dilute a startup’s original vision.
As Hernandez articulates, “You see what someone else launched. You react. You start adding things. You slowly lose the clarity that made your company interesting in the first place.” This reactive approach, he argues, can lead to a loss of differentiation and strategic focus.
The Enduring Value of Customer Insight
Ultimately, Hernandez concludes that while features can be replicated and capital can be raised, the most defensible and difficult-to-copy asset is deep customer insight. He shifts the focus from external comparisons to internal strengths.
Hernandez states, “What do we understand about the customer that they don’t? That’s the part I want to protect.” He emphasizes that true competitive advantage lies not in matching features but in possessing a unique understanding of customer needs and pain points that competitors cannot easily replicate.
📝 About This Content
This article is based on insights shared by Mario Hernandez on LinkedIn.
📅 Originally posted on August 10, 2026 | View original post on LinkedIn →