One of the greatest sources of motivation in solving a problem is the anticipation to use the solution. If a good solution already exists then you're not going to have that.

Think of the Zune team. Those guys were trying to solve a problem that the iPod had already solved so well. Where's the excitement? They had to make up artificial problems for the Zune to solve (WiFi song sharing) just to get excited about it. The problem is that the market doesn't care about artificial problems.

Take online time tracking applications for example. I was looking through Mixergy earlier and there was an interview with an entrepreneur who runs a time tracking app ( http://mixergy.com/tom-rossi-molehill-interview/ ) which reminded me of an interview I'd read a while ago with another entrepreneur who also runs a time tracking app ( Clockspot , http://www.fourhourworkweek.com/blog/2010/12/11/engineering-... )

And of course HN user, Amy Hoy, also blogs about her profitable time tracking SAAS app Freckle ( letsfreckle.com ).

I bet they weren't the first to come up with the idea of online time tracking applications, and more people will come up with similar businesses in the future but as long as they have some differentiation and find users (or rather, customers) its irrelevant how shiny and new the "idea" is.

Re-do everything above and add the word "social" next to them (e.g.: Social CRM)

It can be done.

What I'm trying to say is that there are traditional tools, the baseline, the fundamentals, such as the list I mentioned above.

Then there's another genre which add the 'social aspect' to the traditional tools.

Did I mention freckle to be a social time tracking? Nope :)

We have a similar problem in research, where we have to always demonstrate that what we do is novel. A technique that I have taken a liking to is to talk about all of the related work as soon as possible, so we can distinguish ourselves immediately. The difficulty with only distinguishing yourself at the end is that your audience has been bearing a "someone has already done this" grudge the whole time. It's difficult for them to let that go, no matter how good your answer is.

edit: I just looked at the page for your startup, and it wasn't immediately obvious to me that your site is a place to find classes out in the real world.

Yes and no. I'd maybe try to rephrase that to something along the lines of "I've looked through their site and I haven't seen any evidence of them attracting users". Dismissing a rival with "meh, no-one uses it!" makes it sound like you haven't really considered the competition.

And if you don't have a list of damned good reasons why no one uses X, then they shouldn't give you any money.

BTW, I don't waste too much time concerning their success (just a once a month check) especially since my company's success is most important. No one asks "Isn't your company just like X" when you are winning :)

A really simple graphical explanation about who pays what might work? I really don't know, but what does peak my interest is that it seems like it will be a variety of crazy stuff rather than another lesson in math.

I liked the comment that you should start your pitch with what others are doing and how you will address a different market or beat them in their own market.

This stuff is obviously really tricky, but I feel like you have something you just are not showing.

Just keep their advice in context.

"Don't be afraid to enter a crowded market. Just be better than everybody else."

That's my mantra, personally. The stuff we're doing at Fogbeam Labs competes - to some extent or other - with stuff being done by Jive Software, Alfresco, Yammer, IBM, Cisco, Microsoft and a few other also-rans. But we really don't care, because we intend to simply make better products and kick the holy shit out of Jive Software, Alfresco, Yammer, IBM, Cisco and Microsoft.

Oh yeah, we're a little bit brash too. Ah, well, I always said one of my mindsets was to be "The Mötley Crüe of software companies." \m/

    I always liked the saying that the early bird gets
    the worm. However, the second mouse gets the cheese.
    Breaking new ground means that you get to be the
    first one out there, but it also means you have no
    paths to follow, no wisdom to heed, and no mentors to
    be mentored by. You have to hack that sucker open.
    It's harder. It really is.

It's very difficult to encourage first-time entrepreneurs who fall into the belief that their idea is the most valuable asset to their success. You hear it all the time, "I had this great idea, but then I got online and saw that it was taken." This is no way to think when it comes to business.

In my mind it is absolutely critical to understand that markets are always changing and consumer taste is always changing. To be sure, there ARE some formidable challenges in more established and saturated markets, but nothing is guaranteed. There is always room for innovation and elegant solutions.

You can rest assured that if there is no competition, there will be. You can also rest assured that if competition exists, someone is making money. Why not you too?

Those guys understood the user well and built a great user experience around what had previously been lacklustre at best.

But I think that there is also another point to make. It's true that there is often space to be the one idea that delivers in a way that is easy enough to use for the general user to the point of having the chance to be the winning product. But I believe that that kind of answers from investors shows in general a pretty clouded judgement.

I think that when they respond like that, it means that they don't actually like the idea in the first place.

Otherwise, exactly "because" there is some other similar product around, that in general means that there is some level of market validation. And if it's possible to show that those companies are profitable, then it's likely, if they trust your team, that also your company will be profitable.

This should be enough, you don't necessarily need to convince them that you will kill them all, you just need to convince them that you will make money.

Then, after you convinced them, you can keep going with your goal of being the unique winner of that market.

I thought those first services were great but then someone else came and executed so much better that I switch. Accept that fact that you will (almost) never have a truly unique idea and just focus on executing astronomically better than anyone else ever has.

This is GOLD. Drew probably found the competitive edge by figuring out why the investor didn't use those other file sharing service and fixed that investor's pain