More meaningful advice is to hide the magnitude of your success if the barriers to entry are low. You will get lots of competition once others know they can fast-follow and make money. Instead, keep it a secret and race to lock up the market.
Take Groupon. After iterating, they found explosive revenue growth. Everyone knew how rapid the growth was - every deal lists its revenue on the site & they announced massive fundraises. Add that to low barriers to start a competitor, and we had HUNDREDS of Groupon clones in 2010.
Take Uber. Many people think that they're doing well - high ASP, thousands of vigilant customers (thousands took to Twitter to protest Washington DC legislation that would ban Uber). Since each city is a new market to be built from scratch, new entrants have an opportunity to compete, thus Uber has many competitors: Lyft, Hailo, Flywheel, Sidecar, Cabulous, TaxiMagic.
If you're making money, you will get competition. No matter what. So keep that success a secret while you build competitive barriers to own the market.
Take Groupon. After iterating, they found explosive revenue growth. Everyone knew how rapid the growth was - every deal lists its revenue on the site & they announced massive fundraises. Add that to low barriers to start a competitor, and we had HUNDREDS of Groupon clones in 2010.
Take Uber. Many people think that they're doing well - high ASP, thousands of vigilant customers (thousands took to Twitter to protest Washington DC legislation that would ban Uber). Since each city is a new market to be built from scratch, new entrants have an opportunity to compete, thus Uber has many competitors: Lyft, Hailo, Flywheel, Sidecar, Cabulous, TaxiMagic.
If you're making money, you will get competition. No matter what. So keep that success a secret while you build competitive barriers to own the market.