Sometimes the best response to a competitor is nothing
Hi Everyone,
The company, Gorillas, delivered groceries in ten minutes in Berlin, London, and other European cities. Getir and Flink also delivered groceries in the same cities, so the three companies competed with price discounting - and discounts meant every order lost money.
To keep going, Gorillas raised about $1 billion in 2021, matching its rivals' rounds. When it needed more in 2022, investors had lost interest. That December, it sold to Getir for $1.2 billion — less than the $1.3 billion it had raised in total.
Today we're sharing three questions to answer before you respond to any competitor announcement, plus one number to agree with your board or leadership team.
Two types of envy
Researchers at Tilburg University found that envy splits into two types. Benign envy motivates you to improve your own position, while malicious envy focuses your attention on bringing your rivals down.
Gorillas' discounting was driven by the second type. The goal was to take customers from Getir and Flink, even if it meant losing money on their orders.
The three questions below shift your response to competitor news to the first type - ie, what it means for your own plan.
Three questions for any competitor announcement
Before you respond to a competitor's announcement, write down your answers to these three questions.
1. What new fact did we learn? A client win tells you which segment is buying right now, and a senior hire tells you where they plan to invest. Write the fact in one sentence. If the only fact is "they're doing well," you have nothing to act on.
2. Were we already planning this? If a decision appears in your plan for the first time today, the announcement created it. Park it for a few weeks and see whether it still looks necessary once the news is old.
3. Which of our numbers says we're behind? Point to a specific number, like your growth rate or your win rate against that competitor. If the number hasn't changed since last month, your position hasn't changed either.
Competitors can still hurt you, and sometimes a strong response is exactly what's needed. The above test tells you whether you're responding to an actual change in your business or simply reacting to their announcement.
When the pressure comes from your board
Your board, investors, or leadership team see the same news, and it often lands in your inbox with a note asking for your thoughts.
Answer with your three questions, and name the number you'd watch. For example: "Their client win tells us mid-market is buying. Nothing on our plan changes. The number we track against them is win rate, and it hasn't moved."
Go deeper
👉 SaaStr: It Doesn't Really Matter When Your Competitor Gets Acquired — read this the next time an acquisition in your market ruins your morning; Lemkin walks through deal after deal where the acquired rival stopped being a threat.
👉 Sifted: Signs things aren't looking good for Gorillas — the reporting from inside the Gorillas story, written months before the sale, if you want the full version.
👉 Psychology Today: The important distinction between benign and malicious envy — a short read on the two types of envy and which one leads to spending contests.
👉 Harvard Business Review: When Winning Is Everything — use this to spot the three conditions that push leaders into overpaying: a head-to-head rival, time pressure, and an audience.
Coming up tomorrow
Tomorrow, we'll show you how to spot a top performer who's thinking about leaving while there's still time to change their mind.