Everyone obsesses about competition when product and execution are so much more important.  And it’s also execution in the right area/sector at a time when businesses or people need your product, and the economics of the market space allow for success.  May you live in interesting times and be a creature of your times.

For example, being an app developer on the iPhone is a great place to be.  The app store allows for tons of entrepreneurs to make money using a friction free platform.  To make a VC type return, you have to be one of the best producers on the platform, but there is plenty to eat and all boats rise for those who are shooting, or willing as a fallback, to be Ramen-profitable.

The same can be said of cloud storage.  It just makes sense for consumers and businesses, and this tide will raise many players in the space including Pogoplug, drop.io, and Dropbox.  Ryan McIntyre wrote a great post about Foundry’s investment in Pogoplug.  He argues that Pogo is much more affordable that “true” cloud platforms, and I think his argument makes sense.  However, the overall market shift to cloud will benefit all players who have good products in the space.  I’m going to buy a Pogo and continue to use the other two.  Some consumers and businesses may use only one.  But the reality is, you want to be one of these guys and not a consumer hard-drive manufacturer targeting end-buyers.

The macro trends so often outstrip everything else.  Businesses worry so much about their competitors “beating” them when relatively few businesses fail because of competitors.  Most failures can be attributed to failed business models, poor execution, or a solution looking for a problem.  And, relatively few businesses exist in markets where network effects result in winner-take-all.

The importance of industry and market trends is why so many VCs and public market investors use a thematic investing approach.  Unless you can do a hedged trade, who wants to bet against even the losers in a market witnessing tremendous tailwinds.  As an entrepreneur, you don’t have the opportunity to go long a good company in a bad sector, while simultaneously shorting the sector index.