In more formal terms, if you are trying to steal someone else's customer you have to do something on day 1 (first sale) that is more than 100% as good.
But if you are marketing to different customers, you are acting like a reseller of your competition, with the difference that you don't actually have to buy it from them, but can make it at cost.
It's far better to be in the second situation. I don't think the right strategy is to take on entrenched competition head-on. It's better to create a new market.
If you start with a fresh idea, then you have to test and discover if what you are offering is viable. By taking an existing product or service, and improving upon it, that entire first phase of discovery is done for you.
That's why most new businesses aren't building something novel (ie: opening up a restaurant, retail store, software consulting, etc...).
That discovery phase is expensive. So if you're boot-strapping or limited on capital and time, then you're in a situation where creating something new is extremely risky. Even large companies with lots of resources often fail when launching a novel product.
Not every company is like Apple.
And conversely, many successful companies built on existing solutions. Google wasn't the first search engine. Facebook wasn't the first social network. Microsoft Word wasn't the first word processor.
I'll agree that "It's better to create a new market." But only IF you have the resources to take on that kind of risk.
An ability to intuit what's right - what'll work - without needing to test and prove every hypothesis (expensive), or worse: launch a product that falls flat (crazy expensive). It's definitely something some people are better at than others. Jobs was obviously a total pro. Gates was alright. Ballmer sucks at it.
A lot of that is taste. Taste mixed with direction.
I'm not talking about stealing from competition. What I'm saying is that every startup is solving a pain point or a need-state of some sort. That's the reason for the existence of the startup in the first place. You might have competitors attempting to solve the same pain point in the same way, and you might not. Either way, you're trying to solve a pain point.
How do you gauge the validity of your product and find your first 100 users? You do this by gauging the validity of the pain point you've identified. You do this because, in a sense, the value of your product is the delta between Your Solution and User Pain. Nine times out of ten, users have an existing solution (or behavior) they're doing to try to solve the pain -- but your product is going to be better, or at least you hope.
Let's look at your iPod example. There were some MP3 players in the market before the iPod launched, but for the sake of argument, we'll say that these players were insignificant at the time. So what was the pain point, and what was the existing solution, when Apple launched the iPod? The pain point was not being able to take your music library on the go -- most people had to make do with a single CD at a time. Their existing solutions? Walkmen, portable radios, MP3 collections on their computers, and so forth. What was Apple's solution? "1,000 songs in your pocket."
It's a common misconception that Apple "creates new markets" by bringing entirely-new-to-the-world products to everybody at once. Yes, they can do that now. They've got billions of dollars, a well-oiled marketing and distribution machine, their own highly successful sales channel, and distribution at every major retailer in the country. But that wasn't the case back in 2001. When Apple launched the iPod, it didn't launch to "everybody." It had to start with a segment of the market, which in 2001, was a relatively small set of Mac users and early tech adopters with big MP3 collections. It addressed and added more segments over the next few years, slowly building a snowball into critical mass, which it wouldn't achieve until roughly 2004-2006.
Most startups are like Apple in 2001, not Apple in 2014. They don't have a megaphone they can shout from. Their customer set isn't the set of basically all consumers. In the long run, sure, that's a fantastic place to be. But you have to start somewhere a lot more specific.
Which brings me back to the original topic: how do you get your first 100 users? The best way to get them is to assess which subset of users you believe will have the biggest delta between your value proposition and an existing need or pain. That's all I was trying to say. It's not about "stealing someone else's customers," per se. It's about solving needs. In the long run, maybe a billion people have this need, and you're indeed opening up a new market. Awesome. But you can't start there. You don't start with the set of all addressable users; you start with a subset of extremely addressable users.
By definition if the startup can get users to do something, anything, then those users are doing something, anything using the startup - also by definition. If they weren't doing something, anything with the startup, they would either a) be doing something, anything without the startup (pain point) or b) experiencing a need-state (something, anything as a latent need that they are not using.) This would follow from definitions.
If you're not begging the question, could you propose a hypothetical startup as a counterexample, i.e. describe a startup that would not be solving a pain point or need-state of some sort, if we imagine the (counterfactual) scenario that people do however use it.
For example: if a startup sells you the right to remove a virus (that you didn't know about, and which doesn't exist). Is this a pain point? Is this a latent need? By definition it would have to be, as you are paying for it. That's why I say you're begging the question. Kaspersky by definition is filling the need to feel secure (by the definition that they are actually making sales.)
If a fitness company really sells you the knowledge that you're at least doing something, by staying enrolled, even though its model depends on 90% of people not showing up. That would be an example. Are they filling a need to be enrolled, without going? By definition, they are.
If these skinner-box games (apps) get traction, without being fun, then are they filling a need? By definition they are. Zynga by definition is filling a need to "casually game". (By the definition that they are doing so.)
McDonald's is by definition filling a need for McDonald's food and/or experience etc.
So to talk about 'needs' or 'pain points' are both somewhat silly, if we get to define these things as anything you can get people to do. (Your chance at a counterexample would be to state something you can get people to do, that would not be a latent need or a pain point - for example if you get people to behave very irrationally to use your service. Go ahead and try to come up with examples.)
Specifically, I don't think people felt "pain" over not having a Facebook wall of their friends' updates. It's just something Facebook created for them. It's no good to retroactively say that it was an 'unfilled need' as by definition this would be a catch-all for anything that doesn't fit in the first bucket, of pain points.
Basically, I am saying that if a startup does anything, it would fit by definition into something that was already done, and therefore a pain-point, or something that wasn't already done, and therefore a latent need the moment you start selling it, retroactively, since the beginning of time. The moment the first of something is used or sold it becomes a retroactive latent need going back to the beginning of time. It's simply begging the question completely.
Nor is this a shallow observation. If we switched it to, "build something that people will use", then that is not a very good answer to how to get your first 100 users, as the definition of something that people will use, is something that people use. By definition you can get 100 users if you build something that a hundred people will use...
I suppose you can make deeper observation that the goal of a startup is to make something that people independently will decide to use based on a description alone, or an initial experience, or their friends using it, or its having social prestige, or based on a specific advertising copy, or in the context of the industry and other advertising they've seen, or based on their historical purchasing habits and impressions, or . . . . . . . . .
you see, as soon as you make it deeper, it no longer fits your buckets at all, really. At most we can make it a shorthand for, "produce a company that you would be a customer of", since you can probably judge introspectively whether that you would be a customer if you were still an outsider, given the company's products, copy, marketing, etc.
But make no mistake: plenty of successful startups do not have the kind of offering their founders would have jumped at.
1) What existing solution do you believe your product (or prospective product) is better than?
2) Where can you find a critical mass of people who use the existing solution?
3) Go there. Talk to them. Show them your product.
Now, none of this is trivial. First, because assuming you're operating lean, you start with no real clue if you're "better" than anyone or anything else, or on what dimensions that actually matter. You start with a hypothesis, and you have to seek out opinions (customer development). Second, because the existing solution might not be what you think it is. Or it might not be a product at all. It might be a behavior people are doing, or an "off-label" use of another product.
But by and large, this method works. It might not get you scale. But it'll get you in front of potential users, and those users will be primed to try out your product. The trick is in identifying the existing solution, finding people who use it, and getting some of their time.
I'd definitely advocate doing this before doing any "Show HN" posts. Show HN is a (potential) way to get a lot of traffic and attention in one blast. You don't want to play that card until you know you can benefit from it: either in terms of feedback (you'll want to have vetted out basic users and assumptions first), or in terms of users (aim for some indications of fit before firing the shotgun). The other problem with relying on Show HN, or Reddit, is that there's luck of the draw involved. Sometimes your post gets buried or washed out by the noise. Being good is no firm guarantee of charting to page one.