Asher's Blog

Every founder eventually becomes the incumbent.

I mean this first in the most literal sense. A company cannot continue to describe itself as a new entrant after five, seven, ten or fifteen years in a market. At some point, the startup that once challenged established businesses becomes one of the established businesses. Customers begin to depend on it, younger companies compare themselves with it and the behaviours that once made it disruptive can gradually become habits it now needs to defend.

Before that happens, however, the founder must solve a more immediate problem: how does a young company challenge organisations with more capital, stronger brands, larger teams, deeper relationships and longer operating histories?

The answer is rarely to become a smaller version of the incumbent.

A startup cannot compete effectively by copying the established company’s product, language, branding and distribution while possessing fewer resources. If both companies are attempting to win in exactly the same way, the larger company usually has the advantage.

The challenger has to compete differently.

Do not enter the incumbent’s game with fewer resources

Established companies possess advantages startups should take seriously. They may have regulatory licences, extensive distribution, experienced staff, recognised brands, accumulated data and customer relationships built over decades. Pretending those advantages do not matter is not courage; it is poor strategy.

However, incumbents also make choices that create openings. Their products may have become complicated, their cost structures may require high prices and their internal processes may make them slow. They may focus on the most profitable customers while ignoring smaller or emerging segments. They may continue distributing through channels that worked historically but no longer match how new customers want to buy.

The startup’s opportunity is rarely simply that the incumbent is foolish. The opportunity is that the incumbent has been optimised for a different game.

A bank designed around branches cannot immediately behave like a company designed around mobile distribution. An enterprise-software business dependent on long implementations may struggle to serve companies that want to begin within minutes. A provider earning significant revenue from complexity may not be enthusiastic about making the process radically simpler.

The challenger should ask which assumptions the established company cannot easily abandon without weakening the business it already has.

That is where a different strategy can begin.

Reimagine the competition

I remember preparing for our Y Combinator interview. We had passed the first stage and were preparing for the short conversation in which the partners would decide whether to admit us.

The interview itself was brief, which meant that every answer needed to be clear. I was thinking, praying, meditating and preparing for the questions they were likely to ask. I was pensive because the opportunity mattered, but I also had a level of confidence that we could get in.

Confidence did not remove the need for preparation. Believing that something will happen is not a substitute for being ready when the moment arrives.

I knew we would probably be asked about the size of the market and how we intended to deal with competition. We were entering a category in which other companies already existed, so saying that there was no competition would have made no sense. The useful question was not whether competitors existed; it was whether we could redefine the basis on which the market competed.

I arrived at an answer that made our strategy clearer to me as well. We did not need merely to reproduce the existing category more efficiently. We could reimagine what the category should become, which customer problems belonged together and where the company could create value that the present definition of the market ignored.

That insight continues to affect how I think about our future today. There are details I would not publish because some strategic advantages should remain inside the company until execution makes them difficult to copy. But the principle can be shared: do not accept your competitor’s definition of the market as the permanent definition of the market.

The established company may describe the product according to what it already sells. The startup should describe the problem according to what the customer actually needs.

Those two definitions can lead to completely different businesses.

Difference must be fundamental

Founders frequently describe their companies as different when the difference is superficial.

The design is more modern, the tone is friendlier, the price is slightly lower or the product has two additional features. These improvements may help, but they are easy for a well-resourced competitor to reproduce.

A meaningful difference should affect how the company creates value, distributes the product, earns revenue, serves customers or compounds an advantage over time.

The startup should ask:

1. Which customer can we serve exceptionally well that incumbents consistently overlook or serve poorly?
2. Which painful process can we remove rather than merely improve?
3. Which capability can we make accessible to people who previously could not afford or operate it?
4. Which collection of problems appears separate to incumbents but naturally belongs together for the customer?
5. What can we learn or build through usage that makes the product increasingly difficult to replace?

If the answer is only that the startup will work harder, the strategy is fragile. Incumbents can also work hard, and they can hire more people to do it.

The startup needs an asymmetry: a reason its size, focus, technology, cost structure, culture or market position allows it to act differently.

Being small is valuable when it allows the company to make decisions quickly, stay close to customers and pursue a market that appears too insignificant for larger businesses. The startup should use those advantages while they still exist.

The language must also change

You cannot reimagine a category while speaking about it exactly as everybody else does.

Language shapes what customers, employees and investors understand the company to be. If the startup adopts the incumbent’s terminology completely, it may become trapped inside the incumbent’s mental model. Customers will compare the new company feature for feature and ask why they should leave the established provider.

The challenger must explain what has changed in the world, what the established category fails to address and why a new approach has become necessary.

This is not simply a branding exercise. The new language must reflect a real product and strategic difference. Renaming an ordinary service does not create a category. However, when the company genuinely combines capabilities differently or solves a larger problem, language helps customers understand why the old comparison is incomplete.

At Eazipay, for example, thinking only in terms of payroll software can make the company appear to be competing over salary calculations and payment buttons. Thinking more deeply about employer compliance, employee trust, financial access and business infrastructure produces a different understanding of the opportunity.

The language should reveal the larger value being built, not disguise the absence of value.

Distribution determines whether difference matters

A superior strategy without distribution remains an intelligent private theory.

Once the startup understands how it will compete differently, the next question is how the product reaches enough customers to become important. Many founders concentrate on building something excellent and assume that customers will discover it. They underestimate how much of business success depends on repeated, affordable access to the right people.

Distribution should be considered according to the market in which the company operates. A founder does not always need to invent a completely new channel. It may be more useful to understand how trusted products already move through that environment.

In Nigeria and across Africa, products may be distributed through banks, employers, professional associations, agents, religious communities, trade groups, telecommunications companies, accountants, distributors, government programmes or trusted personal networks. The relevant channel depends on the product, the buyer and the level of trust required.

The “place” in the traditional four Ps of marketing is not merely a physical shop. It is the context in which a customer encounters, evaluates, purchases and continues using the product.

A founder should ask:

1. Where does this customer already go for a related decision?
2. Whom does the customer trust before trying a new provider?
3. Which organisation already has access to thousands of the customers we need?
4. What incentive would make that organisation distribute our product?
5. Can the product be delivered through that channel without losing the customer experience or economics?

Distribution partnerships can allow a startup to borrow trust and reach, but they also create dependence. The company should understand who owns the customer relationship, who controls pricing, who possesses the data and how easily the partner can replace the startup.

The objective is not distribution at any cost. It is distribution that makes the company stronger as it grows.

Preparation turns conviction into an answer

My YC experience also reinforced another lesson: certainty about the future does not excuse poor preparation.

A founder may genuinely believe that the company will become successful. That belief can provide the strength required to continue through years of uncertainty. Yet when the company meets an investor, customer, regulator or partner, conviction must be translated into a coherent answer.

Why this market? Why now? Why will customers change? Why are the incumbents unable or unwilling to respond? How will the product reach the market? Why is this team particularly qualified to build it?

These questions should not be treated as obstacles created by sceptical outsiders. They help the founder examine whether the strategy is complete.

The best answers do not merely sound clever during an interview. They continue to guide the company years later because they express something fundamentally true about the opportunity.

I believe we can build one of the most successful companies to come out of Africa if we remain focused and humble. Focus is required because difference disappears when a company chases every available opportunity. Humility is required because the market will keep revealing where our original assumptions are incomplete.

Ambition needs both.

Growth changes the challenger

If the strategy works, the startup will gradually acquire many of the things it once lacked. It will gain customers, employees, capital, regulation, processes and a reputation it must protect.

The founder then encounters a new danger. The company may begin to behave like the incumbents it once criticised.

Decisions slow down because more people must approve them. Products become complicated because the company serves several customer categories. Protecting current revenue becomes more important than exploring the next change in the market. Younger companies begin serving customers the growing company considers too small or inconvenient.

This is how every founder eventually becomes the incumbent—not simply because time has passed, but because success creates assets the company becomes afraid to disturb.

The challenge is not to remain permanently small or pretend to be a startup after the company has matured. The challenge is to preserve the useful habits of a challenger: proximity to customers, willingness to question the category, speed of learning and courage to compete against your own established model.

An incumbent should possess the reliability of a mature organisation without losing the curiosity that created it.

Compete differently, then keep earning the position

A startup challenging established companies should not begin by asking how to look as large as they do. It should ask how to use its present position to do something they cannot easily do.

Reimagine the market. Find the fundamental difference. Explain that difference in language customers understand. Study how trusted products are distributed within the market, and build a path through which many people can encounter and adopt what you have created.

Then prepare seriously enough to explain why the strategy should work, while remaining humble enough to change it when reality disagrees.

If you succeed, the company will no longer be the new entrant. Other founders will study your weaknesses, question your assumptions and approach customers you have neglected. That is not unfair; it is evidence that you have become important.

Every founder eventually becomes the incumbent. The objective is not to avoid that transition. It is to become an incumbent that remains capable of challenging itself.